Oklahoma § 68-2357.104 - Tax credit for railroad reconstruction or replacement

§ 68-2357.104. Tax credit for railroad reconstruction or replacement

expenditures.

A. Except as otherwise provided by this section, for taxable

years beginning after December 31, 2005, and ending before January

1, 2030, there shall be allowed a credit against the tax imposed by

Section 2355 of this title equal to fifty percent (50%) of an

eligible taxpayer’s qualified railroad reconstruction or replacement

expenditures.

B. For tax years 2020 through 2029, the amount of the credit

shall be limited to the product of Five Thousand Dollars ($5,000.00)

and the number of miles of railroad track owned or leased within

this state by the eligible taxpayer as of the close of the taxable

year.

C. The credit allowed pursuant to subsection A of this section

but not used shall be freely transferable, by written agreement, to

subsequent transferees at any time during the five (5) years

following the year of qualification. An eligible transferee shall

be any taxpayer subject to the tax imposed by Section 2355 of this

title. The person originally allowed the credit and the subsequent

transferee shall jointly file a copy of the written credit transfer

agreement with the Oklahoma Tax Commission within thirty (30) days

of the transfer. The written agreement shall contain the name,

address and taxpayer identification number of the parties to the

transfer, the amount of credit being transferred, the year the

credit was originally allowed to the transferring person and the tax

year or years for which the credit may be claimed. The Tax

Commission shall promulgate rules to permit verification of the

timeliness of a tax credit claimed upon a tax return pursuant to

this subsection but shall not promulgate any rules which unduly

restrict or hinder the transfers of such tax credit. The Department

of Transportation shall promulgate rules to permit verification of

the eligibility of an eligible taxpayer’s expenditures for the

Oklahoma Statutes - Title 68. Revenue and Taxation

purpose of claiming the credit. The rules shall provide for the

approval of qualified railroad reconstruction or replacement

expenditures prior to commencement of a project and provide a

certificate of verification upon completion of a project that uses

qualified railroad reconstruction or replacement expenditures. The

certificate of verification shall satisfy all requirements of the

Tax Commission pertaining to the eligibility of the person claiming

the credit.

D. Any credits allowed pursuant to the provisions of subsection

A of this section but not used in any tax year may be carried over

in order to each of the five (5) years following the year of

qualification.

E. As used in this section:

1. “Class II and Class III railroad” means a railroad that is

classified by the United States Surface Transportation Board as a

Class II or Class III railroad;

2. “Eligible taxpayer” means any Class II or Class III

railroad; and

3. “Qualified railroad reconstruction or replacement

expenditures” means expenditures for:

a.

track maintenance, natural disasters, and

reconstruction or replacement of railroad

infrastructure including track, roadbed, crossings,

bridges, industrial leads and track-related structures

owned or leased by a Class II or Class III railroad as

of January 1, 2006, or

b.

new construction of industrial leads, switches, spurs

and sidings and extensions of existing sidings by a

Class II or Class III railroad.

F. The total amount of credits authorized by this section used

to offset tax shall be adjusted annually to limit the annual amount

of credits to Two Million Dollars ($2,000,000.00) for tax years 2018

and 2019 and Five Million Dollars ($5,000,000.00) for tax year 2020

and all subsequent tax years. The Tax Commission shall annually

calculate and publish a percentage by which the credits authorized

by this section shall be reduced so the total amount of credits used

to offset tax does not exceed the applicable annual limit. The

formula to be used for the percentage adjustment shall be the

applicable annual limit divided by the credits claimed in the second

preceding year.

G. Pursuant to subsection F of this section, in the event the

total tax credits authorized by this section exceed the annual

applicable limit in any calendar year, the Tax Commission shall

permit any excess over the annual applicable limit but shall factor

such excess into the percentage adjustment formula for subsequent

years.

Oklahoma Statutes - Title 68. Revenue and Taxation

Added by Laws 2005, c. 413, § 8, eff. July 1, 2005. Amended by Laws

2006, 2nd Ex. Sess., c. 44, § 24, eff. July 1, 2007; Laws 2008, c.

122, § 1, eff. Nov. 1, 2008; Laws 2010, c. 327, § 24, eff. July 1,

2010; Laws 2016, c. 325, § 1, eff. Jan. 1, 2016; Laws 2018, 2nd Ex.

Sess., c. 7, § 1, eff. Jan. 1, 2018; Laws 2020, c. 95, § 1, eff.

Nov. 1, 2020; Laws 2023, 1st Ex. Sess., c. 33, § 1, eff. Nov. 1,

2023.

NOTE: Editorially renumbered from § 2357.102 of this title to avoid

a duplication in numbering.