(a) For tax years beginning after December 31, 2019, there is a credit allowed against the state income tax levied by Section 40-18-2 equal to 50 percent of an eligible taxpayer's qualified railroad rehabilitation expenditures. The tax credit allowed under this section may not exceed three thousand five hundred dollars ($3,500) multiplied by the number of miles of railroad track owned or leased within the state by the eligible taxpayer at the close of the taxable year.
(b) There is created within the Education Trust Fund a separate account named the Railroad Rehabilitation Income Tax Credit Account. The Commissioner of Revenue shall certify to the state Comptroller the amount of income tax credits under this section and the state Comptroller shall transfer into the Railroad Rehabilitation Income Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the income tax credits for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Railroad Rehabilitation Income Tax Credit Account pursuant to this section.
(c) The entire tax credit may be claimed by the taxpayer in the taxable year in which the qualified railroad rehabilitation expenditures are completed and placed into service. Where the taxes owed by the eligible taxpayer are less than the tax credit, the eligible taxpayer may be entitled to claim a refund for the difference.
(d) For the calendar years 2020, 2021, and 2022, the aggregate amount of all tax credits that may be reserved in any one of such years by the department upon certification of rehabilitation plans shall not exceed three million seven hundred thousand dollars ($3,700,000) plus any amount of previous reservations of tax credits that were rescinded during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the department in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than eleven million one hundred thousand dollars ($11,100,000) be reserved by the department during the period of August 1, 2019 through August 1, 2022. For purposes of this chapter, "tax year" shall mean the calendar year.
(e) Tax credits granted to a partnership, a limited liability company, S Corporations, trusts, or estates shall be claimed at the entity level and shall not pass through to the partners, members, or owners.
(f) All or any portion of the income tax credit authorized under this section may be transferable and assignable by written transfer agreement and subject to any notice and verification requirements to be determined by the Department of Revenue. Any tax credits transferred shall be at a value of at least eighty-five percent (85%) of the present value of the credits. However, once a credit is transferred, only the transferee may utilize the credit and the credit may not be transferred again. An eligible transferee of the credit may use the amount of credits transferred to offset any income tax due under Chapter 18 of Title 40. The Department of Revenue, by rule, shall adopt a written transfer agreement form. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain such other information as the Department of Revenue may from time to time reasonably require. For each transfer, the transferor shall file: (1) a completed transfer statement form; (2) a copy of the tax credit certificate issued by the Commissioner of Revenue documenting the amount of tax credits which the transferor intends to transfer; (3) a copy of the proposed written transfer agreement; and (4) a transfer fee payable to the department in the amount of one thousand dollars ($1,000) per transferee listed on the transfer statement form. The transferor shall file with the Department of Revenue a fully executed copy of the written transfer agreement with each transferee within 30 days after the completed transfer. Filing of the written transfer agreement with the Department of Revenue shall perfect such transfer with respect to such transferee. Within 30 days after the Department of Revenue's receipt of the fully executed written transfer agreement, the Department of Revenue shall issue a tax credit certificate to each transferee listed in the agreement in the amount of the tax credit so transferred. Such certificate shall be used by the transferee in claiming the tax credit. The Department of Revenue may adopt such additional rules as are necessary to permit verification of the ownership of the tax credits but shall not adopt any rules which unduly restrict or hinder the transfer of the tax credits.
Last modified: May 3, 2021