Rail Tax Credit Changes Could Impact Your Supply Chain

Key Details The railroad industry met with Congress this week to push for modernization of the 45G tax credit, a program that reimburses railroads 40 cents per dollar invested in infrastructure. Created in 2005 and made permanent in 2020, the credit has funded over $8 billion in rail improvements while reducing derailments by 50%. Why It Matters Smaller railroads depend on this funding for long-term planning and maintenance. However, the current cap of $3,500 per mile hasn't kept pace with inflation, while actual track upgrade costs now reach $15,000 or higher. Rail executives are asking Congress to raise the cap to $6,100, index it to inflation, and cover track purchased since 2015. The Connection to Trucking A stronger rail network benefits motor carriers by supporting industrial development and improving supply chain connectivity. When rails can't maintain infrastructure, more freight shifts to trucks, increasing congestion and competition for loads. Better-funded railroads mean a more balanced multimodal transportation system. What's Next With 380 rail industry participants meeting with Congress, the push for 45G modernization has bipartisan support. Monitor legislative developments that could reshape how freight moves across America.