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Wisconsin Legislature: SB213: Bill Text
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SB213: Bill Text
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2025 - 2026 LEGISLATURE
LRB-1305/1
KP:cdc
2025 SENATE BILL 213
April 16, 2025 - Introduced by Senators
Quinn
,
Feyen
,
Tomczyk
,
Felzkowski
and
Testin
, cosponsored by Representatives
Novak
,
Tranel
,
Armstrong
,
Donovan
,
Franklin
,
Gundrum
,
Melotik
,
Mursau
,
Pronschinske
and
Swearingen
. Referred to Committee on Agriculture and Revenue.
SB213,1,4
1
An Act
to amend
71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g)
2
and 71.45 (2) (a) 10.;
to create
71.07 (8t), 71.10 (4) (cu), 71.28 (8t), 71.30 (3)
3
(cu), 71.47 (8t), 71.49 (1) (cu) and 73.03 (78) of the statutes;
relating to:
a tax
4
credit for rail infrastructure modernization.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for railroads that make rail infrastructure and railroad maintenance expenditures. Under the bill, a claimant that is classified by the U.S. Surface Transportation Board as a class II or class III railroad may claim a rail infrastructure modernization credit that is equal to the sum of the following amounts:
1. Fifty percent of the qualified short line railroad maintenance expenditures made by the railroad. This portion of the credit is limited to an amount equal to $5,000 multiplied by the number of miles of railroad track owned or leased by the railroad. The bill defines “qualified short line railroad maintenance expenditures” as gross expenditures for railroad infrastructure rehabilitation or maintenance improvements located in this state.
2. Fifty percent of the railroad’s qualified new rail infrastructure expenditures. This portion of the credit is limited to $2,000,000 per project. The bill defines “qualified new rail infrastructure expenditures” as expenditures for rail infrastructure and improvements in this state placed in service after December 31, 2024.
A claimant that owns or leases a rail siding, industrial spur, or industry track may claim the portion of the credit described above for the claimant’s qualified new rail infrastructure expenditures.
Before claiming a credit under the bill, a claimant must first apply to and receive approval from the Department of Revenue to claim the credit. DOR may approve up to $10,000,000 in total credits for qualified new rail infrastructure expenditures for each tax year, and DOR must approve applications for credits on a first-come, first-served basis.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB213,1
1
Section
1
.
71.05 (6) (a) 15. of the statutes is amended to read:
SB213,2,7
2
71.05
(6)
(a) 15. The amount of the credits computed under s. 71.07 (2dm),
3
(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5i), (5j), (5k),
4
(5r), (5rm), (6n),
(8t),
and (10) and not passed through by a partnership, limited
5
liability company, or tax-option corporation that has added that amount to the
6
partnership’s, company’s, or tax-option corporation’s income under s. 71.21 (4) or
7
71.34 (1k) (g).
SB213,2
8
Section
2
.
71.07 (8t) of the statutes is created to read:
SB213,2,10
9
71.07
(8t)
Rail infrastructure modernization credit.
(a)
Definitions.
In
10
this subsection:
SB213,2,12
11
1. “Claimant” means a person who files a claim under this subsection and who
12
is one of the following:
SB213,2,15
13
a. A railroad company located wholly or partly in this state that is classified by
14
the federal surface transportation board as a class II or class III railroad for the
15
taxable year to which the claim applies.
SB213,3,3
1
b. An owner or lessee of a rail siding, industrial spur, or industry track on or
2
adjacent to a railroad in this state during the taxable year to which the claim
3
applies.
SB213,3,10
4
2. “Qualified new rail infrastructure expenditures” means expenditures for
5
rail infrastructure and improvements in this state placed in service after December
6
31, 2024, including expenditures for the acquisition of right-of-way; engineering;
7
construction of new track such as industrial leads, switches, spurs, and sidings;
8
rehabilitation of existing inactive track to reinstate operation; loading dock
9
improvements; and transloading structures involved with servicing customer
10
locations or expansions.
SB213,3,15
11
3. “Qualified short line railroad maintenance expenditures” means gross
12
expenditures for railroad infrastructure rehabilitation or maintenance
13
improvements located in this state, including but not limited to rail, tie plates, joint
14
bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings,
15
signs, safety barriers, crossing signals and gates, and related track structures.
SB213,3,19
16
(b)
Filing claims.
For taxable years beginning after December 31, 2024, and
17
before January 1, 2035, and subject to the limitations provided in this subsection, a
18
claimant may claim as a credit against the tax imposed under s. 71.02, up to the
19
amount of those taxes, all of the following:
SB213,3,23
20
1. An amount equal to 50 percent of the qualified short line railroad
21
maintenance expenditures made by the claimant during the taxable year to which
22
the claim relates if the claimant is classified by the federal surface transportation
23
board as a class II or class III railroad for the taxable year.
SB213,4,2
24
2. An amount equal to 50 percent of the qualified new rail infrastructure
1
expenditures made by the claimant during the taxable year to which the claim
2
relates.
SB213,4,5
3
(c)
Limitations.
1. No credit may be claimed under par. (b) 1. for any qualified
4
short line railroad maintenance expenditures that are used to claim a tax credit
5
under federal law or that are funded by a federal or state grant.
SB213,4,10
6
2. The total amount of the credits under par. (b) 1. and ss. 71.28 (8t) (b) 1. and
7
71.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to
8
$5,000 multiplied by the number of miles of railroad track owned or leased by the
9
claimant in this state on December 31 of the taxable year to which the claim
10
applies.
SB213,4,13
11
3. The total amount of the credits under par. (b) 2. and ss. 71.28 (8t) (b) 2. and
12
71.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per
13
project application approved by the department.
SB213,4,17
14
4. No credit may be allowed under this subsection unless the claimant
15
submits an application to the department, at the time and in the manner
16
prescribed by the department, and the department approves the application. The
17
claimant shall submit a copy of the approved application with the claimant’s return.
SB213,5,2
18
5. Partnerships, tax-option corporations, and limited liability companies may
19
not claim a credit under this subsection, but the eligibility for, and the amount of,
20
the credit are based on their expenditures made under par. (b). A partnership, tax-
21
option corporation, or limited liability company shall compute the amount of the
22
credit that each of its partners, shareholders, or members may claim and shall
23
provide that information to each of them. Partners of a partnership, shareholders
1
of tax-option corporations, and members of limited liability companies may claim
2
the credit in proportion to their ownership interest.
SB213,5,4
3
(d)
Administration.
1. Section 71.28 (4) (e), (g), and (h), as it applies to the
4
credit under s. 71.28 (4), applies to the credit under this subsection.
SB213,5,10
5
2. If a credit computed under this subsection is not entirely offset against
6
Wisconsin income or franchise taxes otherwise due, the unused balance may be
7
carried forward and credited against Wisconsin income or franchise taxes
8
otherwise due for the following 5 taxable years to the extent not offset by these
9
taxes otherwise due in all intervening years between the year in which the
10
expenditure was made and the year in which the carry-forward credit is claimed.
SB213,5,20
11
(e)
Transfer
. Any person may sell or otherwise transfer the credit under par.
12
(b), in whole or in part, to another person who is subject to the taxes imposed under
13
s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and
14
submits with the notification a copy of the transfer documents, and the department
15
certifies ownership of the credit with each transfer. The transferor may file a claim
16
for more than one taxable year on a form prescribed by the department to compute
17
all years of the credit under par. (b) at the time of the transfer request. The
18
transferee may first use the credit to offset tax in the taxable year of the transferor
19
in which the transfer occurs, and may use the credit only to offset tax in taxable
20
years otherwise allowed to be claimed and carried forward by the original claimant.
SB213,3
21
Section
3
.
71.10 (4) (cu) of the statutes is created to read:
SB213,5,22
22
71.10
(4)
(cu) Rail infrastructure modernization credit under s. 71.07 (8t).
SB213,4
23
Section
4
.
71.21 (4) (a) of the statutes is amended to read:
SB213,6,3
24
71.21
(4)
(a) The amount of the credits computed by a partnership under s.
1
71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
2
(5g), (5i), (5j), (5k), (5r), (5rm), (6n),
(8t),
and (10) and passed through to partners
3
shall be added to the partnership’s income.
SB213,5
4
Section
5
.
71.26 (2) (a) 4. of the statutes is amended to read:
SB213,6,10
5
71.26
(2)
(a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
6
(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5g), (5i), (5j), (5k), (5r),
7
(5rm), (6n),
(8t),
and (10) and not passed through by a partnership, limited liability
8
company, or tax-option corporation that has added that amount to the
9
partnership’s, limited liability company’s, or tax-option corporation’s income under
10
s. 71.21 (4) or 71.34 (1k) (g).
SB213,6
11
Section
6
.
71.28 (8t) of the statutes is created to read:
SB213,6,13
12
71.28
(8t)
Rail infrastructure modernization credit.
(a)
Definitions.
In
13
this subsection:
SB213,6,15
14
1. “Claimant” means a person who files a claim under this subsection and who
15
is one of the following:
SB213,6,18
16
a. A railroad company located wholly or partly in this state that is classified by
17
the federal surface transportation board as a class II or class III railroad for the
18
taxable year to which the claim applies.
SB213,6,21
19
b. An owner or lessee of a rail siding, industrial spur, or industry track on or
20
adjacent to a railroad in this state during the taxable year to which the claim
21
applies.
SB213,7,4
22
2. “Qualified new rail infrastructure expenditures” means expenditures for
23
rail infrastructure and improvements in this state placed in service after December
24
31, 2024, including expenditures for the acquisition of right-of-way; engineering;
1
construction of new track such as industrial leads, switches, spurs, and sidings;
2
rehabilitation of existing inactive track to reinstate operation; loading dock
3
improvements; and transloading structures involved with servicing customer
4
locations or expansions.
SB213,7,9
5
3. “Qualified short line railroad maintenance expenditures” means gross
6
expenditures for railroad infrastructure rehabilitation or maintenance
7
improvements located in this state, including but not limited to rail, tie plates, joint
8
bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings,
9
signs, safety barriers, crossing signals and gates, and related track structures.
SB213,7,13
10
(b)
Filing claims.
For taxable years beginning after December 31, 2024, and
11
before January 1, 2035, and subject to the limitations provided in this subsection, a
12
claimant may claim as a credit against the tax imposed under s. 71.23, up to the
13
amount of those taxes, all of the following:
SB213,7,17
14
1. An amount equal to 50 percent of the qualified short line railroad
15
maintenance expenditures made by the claimant during the taxable year to which
16
the claim relates if the claimant is classified by the federal surface transportation
17
board as a class II or class III railroad for the taxable year.
SB213,7,20
18
2. An amount equal to 50 percent of the qualified new rail infrastructure
19
expenditures made by the claimant during the taxable year to which the claim
20
relates.
SB213,7,23
21
(c)
Limitations.
1. No credit may be claimed under par. (b) 1. for any qualified
22
short line railroad maintenance expenditures that are used to claim a tax credit
23
under federal law or that are funded by a federal or state grant.
SB213,8,4
24
2. The total amount of the credits under par. (b) 1. and ss. 71.07 (8t) (b) 1. and
1
71.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to
2
$5,000 multiplied by the number of miles of railroad track owned or leased by the
3
claimant in this state on December 31 of the taxable year to which the claim
4
applies.
SB213,8,7
5
3. The total amount of the credits under par. (b) 2. and ss. 71.07 (8t) (b) 2. and
6
71.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per
7
project application approved by the department.
SB213,8,11
8
4. No credit may be allowed under this subsection unless the claimant
9
submits an application to the department, at the time and in the manner
10
prescribed by the department, and the department approves the application. The
11
claimant shall submit a copy of the approved application with the claimant’s return.
SB213,8,19
12
5. Partnerships, tax-option corporations, and limited liability companies may
13
not claim a credit under this subsection, but the eligibility for, and the amount of,
14
the credit are based on their expenditures made under par. (b). A partnership, tax-
15
option corporation, or limited liability company shall compute the amount of the
16
credit that each of its partners, shareholders, or members may claim and shall
17
provide that information to each of them. Partners of a partnership, shareholders
18
of tax-option corporations, and members of limited liability companies may claim
19
the credit in proportion to their ownership interest.
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