What does Preamble of Freight RAILCAR Act of 2025 do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to provide a tax credit to encourage the replacement or modernization of inefficient, outdated freight railcars, and for other purposes,' aims to amend the Internal Revenue Code of 1986. The bill intends to provide a tax credit. The stated purpose of the tax credit is to encourage the replacement or modernization of inefficient, outdated freight railcars.

What does SHORT TITLE. of Freight RAILCAR Act of 2025 do?

This bill is formally titled the Freight Rail Assets Investment to Launch Commercial Activity Revitalization Act of 2025.

What does FREIGHT RAILCAR MODERNIZATION CREDIT. of Freight RAILCAR Act of 2025 do?

This section establishes a freight railcar modernization credit under Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986. The credit is equal to 10 percent of a taxpayer's freight railcar fleet modernization expenses. A taxpayer may only take into account a maximum of 1,000 qualified freight railcars per taxable year. Qualifying expenses include the basis of newly built replacement railcars and qualified railcar modernization expenditures. A qualified newly built replacement railcar must be built after the enactment of this section, ordered or originally placed in service within three years of enactment, and replace two existing railcars. Qualified freight railcars must meet significant improvement requirements for capacity, fuel efficiency, or performance, and be built in a qualified facility. Significant improvements require at least an 8 percent increase in capacity or fuel efficiency, or meeting specific Association of American Railroads standards. The credit is denied if a deduction or credit is allowed for the same expense under another provision of the Internal Revenue Code. The basis of a railcar is reduced by the amount of the credit allowed. The amendments apply to property placed in service, and amounts paid or incurred, after December 31, 2024.

What does REPORT ON THE FREIGHT RAILCAR MODERNIZATION CREDIT. of Freight RAILCAR Act of 2025 do?

This section requires the Secretary of the Treasury to submit a report to the House Committee on Ways and Means and the Senate Committee on Finance. The report is due within three years of the Act's enactment. The report must detail activity related to the qualified freight railcar credit under section 45BB of the Internal Revenue Code of 1986. The report must include the number of times the credit was claimed. The report must include the number of railcars scrapped due to the credit. The report must include the number of new railcars entered into contract as a result of the credit. The report must include the number of new railcars built as a result of the credit.

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Freight RAILCAR Act of 2025

Last updated: 2/11/2025 · Introduced: 2/11/2025

Author: Darin LaHood (R-IL)

TL;DR (AI)

This bill establishes a tax credit equal to 10% of qualified expenses for replacing or modernizing freight railcars, incentivizing upgrades to improve capacity, fuel efficiency, or performance.
To qualify, replacement railcars must be newly built and replace two existing railcars, while modernized railcars must demonstrate at least an 8% improvement in capacity or fuel efficiency.
The Secretary of the Treasury must report on the credit's usage, including the number of railcars scrapped, contracted for, and built, within three years of the Act's enactment.

119th Congressin committeeOfficial page

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Includes provisions on preamble, short title., and 2 more.

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