Steam & Excursion > San Luis Valley rail access and Taxes

Following is the claims of the counties for taxes the railroad owes, but for what?

The branch line railroad existence is more valuable than those taxes and few of these taxes should be paid.  The railroad is valuable service.  The railroad buys its own rail, ties, and ballast and most of any crossing costs.  The counties only supply fire protection.  Railroads have their own police amd maintenance forces also.

• Rio Grande County: $877,157
• Conejos County: $635,131
• Costilla County: $390,454
• Alamosa County: $739,000
• Huerfano County: $1,180,122

The Colorado Pacific should refuse or negotiate a better understanding the value of a railroads.
The entire valley could have very quickly lost its railroad service and a whole lot of people would be doing nothing to create value for every ones economy .
 

Your way off course

The taxes are property taxes that all private business with real estate pay ... the variable amounts are a function of actual assessed areas in each county and at the assessment rate for each county.  It is a cost of doing business.  SLRG and the Rio Grande Scenic RR missed property tax payments as well.

Odyssey
Evergreen, CO



Edited 1 time(s). Last edit at 11/19/22 22:12 by Odyssey.

Railroads pay property taxes and they always have.

Not always.

Bob Wilcox
Charlottesville, VA
My Flickr Shots

Does the city of Cincinnati pay taxes to KY and TN for the railroad it owns in those states?

Posted from Android

The county levies taxes at the total tax rate on the assessed value of each property in the county.   The total rate includes individual tax rates for all taxing entities with the particular county tax rate area,  principally the county itself,  cities, school districts,  other special districts and the like.   Taxes are paid to the county tax collector who then allocates the moneys to the varioius taxing entities within the tax rate areas.

As for the city of Cincinnati owning railroad property I don't know what the laws are in those states.  In California,  any property owned by a government or non-profit entity (such as churches,  some hospitals, etc),  while assessed as to value,  is exempt from paying property taxes.



Edited 1 time(s). Last edit at 11/20/22 16:25 by masterphots.

A low volume Branch line railroad can not be operated without profit to the owner.  Take for example the Ed Ellis former Saratoga & North Creek RR whch was just a operator over tracks which Warren County owned.  Ed could not even make his company a profit when there were no taxes paid in Warren County.  Warren County scrapped their idea of taxes and bought the railroad from the D&H when they abandoned operations and now the railroad track is a total expense and liability on the County..  The town of Corinth bought the other half of S&NC line in Satatoga to protect the paper mill traffic which eliminated all taxes they collected on the railroad.  The papermill closed anyways and nothing is paying taxes to Corinth.

What I am saying it is better in the long run for the property taxes on an operating railroad to be as close to zero to support the continued operation of the railroad that is a vital life line to farms, industry and mining benefit.  Where does the money come from to pay those taxes- it comes from the freight rate on shipping what the railroad handles and makes that product and transportation more costly.  The market place is very competitive so you have to have a lower cost product to move to get the business moving out or the San Luis Valley.  Lower shipping rate by the railroad is superior to developing the business rather than adding expensive cost on those shipping rates account of land taxes.  

The major unknown is who is setting the shipping rates?  Who does the way billing?  We know the San Luis Central RR does they own rate and tariff and they have a lot of customers.  I believe the Union Pacific never gave up its control of the rates and tariffs on the entire San Luis & Rio Grande operation area and only paid the SL&RG a handle fee per car and the SL&RG could not control any of the traffic tariffs and the customers have disappeared.  

It is better to drop the land taxes first before the traffic (customer) is eliminated and than having to buy the railroad to try to keep it in existence.  And WAF can not understand commerce and how it happens.



Edited 1 time(s). Last edit at 11/21/22 08:29 by PlyWoody.

In that case, why not just eliminate all property taxes on any business or commercial enterprise and force the tax burden on to the homeowners.  After all, we want all the businesses to be profitable and could then lower the prices we as consumer pay for their goods or services.  After all, no property taxes lowers the "cost of goods sold".   So, then how does the county pay for the services we want as residents of the county?

Marty Harrison
Knob Noster, MO

You are advocating that these rural counties forgo substantial amounts of tax revenue.  How would they make up the shortfall or what services should they curtail?

You are also valuing railroads over all other businesses.  That's a slippery slope.
 

Exactly my point...no business ought to get a free pass

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Marty Harrison
Knob Noster, MO

Marty, This low volume branch line railroad is not a profitable business but it is a service to the remaining business in the valley and without this railroad, those business can not do business SOP.   These taxes total $3,821,864 and can only come from the freight waybill rate, so if the railroad handles 100 cars a week (5,200 per year)  that would be $7,100 to come out of each car waybill.  Even if you pay it off in ten years that is adding $710 to  the cost of moving each loaded car, half being empty per year.   No one is going to pay $710 on top of existing freight rate per car load. 

Beside, the counties had very limited expense and did nearly nothing for the railroad.  The counties  had no cost related to the railroad and county  business went on without the railroad recently paying any of these land taxes. Yery little was added on to the residences taxes of the valley to  pay any costs related to the railroad.

Since this is a service and not a business it should be "given a free pass".
 

Federal bankruptcy court can and does apportion claims of local back taxes. While the General rule is tax payments have priority that isn't absolute.

Posted from Android

A business that can not generate enough business and thus profits is clearly not providing a needed service to the community, contrary to Plywood's opinion.  And, no county ought not be forced to give up taxes dollars to subsidize somebody's hobby of running a railroad.
 

Marty Harrison
Knob Noster, MO

For one thing, in general the rate of taxation on railroad property is way less than the rate alotted to the
more common business properies in consideraton that the rate of revenue per "lot" is way less than say
that of a McDonalds.

Out 

callum_out Wrote:
-------------------------------------------------------
> For one thing, in general the rate of taxation on
> railroad property is way less than the rate
> alotted to the
> more common business properies in consideraton
> that the rate of revenue per "lot" is way less
> than say
> that of a Mcdonalds

In California,  everything is taxed at a basic 1% of the assessed value of the property.   But railroads and public utilities are assessed by the State Board of Equalization,  not by the county assessor as for other properties.   How the BOE assesses railroads et al is  'proprietory'  Ii.e. secret.  So there is  lobbying involved and if you compare the preliminary valuations to the final BOE-adopted valuations,   you sometimes can see sizeable differences.  But the tax revenues realized by the various counties in which the railroad and other state-assessed property is located is typically 1% of the valuation of said property in the particular county.   If you want to check the valuation of railroads in California,  go to  boe.ca.gov   and find the 2022-23 adopted valuation report.  Every railroad is there from the BNSF to the West Isle Line.

You are certainly correct, I should have said assessed value rather than rate and as you say the path to that number is a BOE
secret. We had disagreements over our parking lot in Vernon which was a flat piece of asphalt but was assessed as being a very
valuable flat piece of asphalt. We finally did win that appeal on the basis ihat it couldn't be developed based on the parking
space per square foot ordinance in place, but what a circus.

Out 

I can offer information on this one state that where a residential house goes up for auction account of no tax payments, the winning bidder does not have to pay any of the never paid taxes, or it would never get a bidder on the property.  That put the property back into active ownership with continued tax receipts.   That should apply to the new Colorado  Pacific purchase, so maybe the new rich owner will get it straightened out and fix the Union Pacific problem.  Different states have different rules.   What a stupid statement to call the railroad a hobby where half the business and jobs along the San Luis Central Railroad would be abandoned if they only had trucking for getting product to market. 

PlyWoody Wrote:
-------------------------------------------------------
> I can offer information on this one state that
> where a residential house goes up for auction
> account of no tax payments, the winning bidder
> does not have to pay any of the never paid taxes,
> or it would never get a bidder on the property. 
> That put the property back into active ownership
> with continued tax receipts.   That should apply
> to the new Colorado  Pacific purchase, so maybe
> the new rich owner will get it straightened out
> and fix the Union Pacific problem.  Different
> states have different rules.   What a stupid
> statement to call the railroad a hobby where half
> the business and jobs along the San Luis Central
> Railroad would be abandoned if they only had
> trucking for getting product to market.

So let said busineses buy the railroad and run it.  Then we'll get.....'we can't afford this, we can't afford that'.   If really true maybe they shouldn't be in business. 

PlyWoody Wrote:
-------------------------------------------------------
  What a stupid
> statement to call the railroad a hobby where half
> the business and jobs along the San Luis Central
> Railroad would be abandoned if they only had
> trucking for getting product to market. 

Before you call anything stupid, how about you explain how the counties would make up for the lost revenue if it did not tax railroad properties.