Passenger Trains > Do RRs pay property taxes?

Does anyone know of a good resource that addresses property taxes paid by railroads?

I was under the impression that railroads paid taxes to state and local governments based on the assesses value of their real estate and improvements , but I couldn't find any confirmation of this after some preliminary research on the Internet.

I Goggled, "property tax railroads," tried to find mention of "property tax" in UPRR's 2007 Annual Report and read state-by-state info sheets from the AAR and searched their website. All to no avail!

I need a reliable source I can point to and say, "Yes! They pay property taxes!" (If, of course, that is true.) It would be nice to know if they pay property tax in every jurisdiction, most of them, or just a few. There's no way I could address any more detail than that in the video.

I'm going to keep digging, but I am posting to see if anyone has a forehead-hitting, "duh!" resource I've overlooked. :-)

I'm doing research for a personal video production project. I'm trying to make a 2 to 3-minute video for You Tube distribution that discusses the ownership of America's railroad network by private companies.

Also, on a somewhat related note, I'd be interested on input regarding the best forum to use to post about my project. I would like to post my script for comments before I lock it down and I will also ask to see if folks would be willing to contribute stock video footage. This project is not for work and I'm not in school; it's purely personal in nature. So, I don't feel too bad asking for community input and help! :-) Details to follow... let me know which of the forums on this site would be best!

Thanks, B

You'd better believe they do. Years ago the high property taxes in New Jersey made it impossible
for any railroad to make a profit on their New Jersey operations.
Today it is much more spread out and sensible, the railroads that are governmen owned of course are
relieved of this burden and the freight railroads have fought these taxes over the years too.
CSX had a case in New York State a few short years back, I don't recall exactly what came of it but
they were complaining about the high property taxes there at the time.
Noel Weaver

One of the most important provisions of the 4R reform act was that taxing bodies could not tax railroads at exorbitant rates. Many taxing bodies were charging railroads several times the rate other taxpayers were kicking in. This became illegal and saved the railroads tons of money. Still, in many communities, railroads are far and away the biggest single taxpayer. Here in the Chicago area, lots of school districts whose territory encompasses rail yards do very well because the railroads pay taxes to them, but don't send any students.

Different states have different tax laws. Find out who collects taxes in your area and ask them how to obtain a copy of at least part of the tax rolls.

Taxes are the number one reason that railroads were, in the past, hasty to rip out a 2nd main, tear down old buildings, etc. The local taxing authorities classed track, ties, sheds, everthing but the dirt as 'improvements' and since the railroad was not locally based, the towns knew they could charge whatever they felt like for these improvements!

retengr Wrote:
-------------------------------------------------------
> You'd better believe they do. Years ago the high
> property taxes in New Jersey made it impossible
> for any railroad to make a profit on their New
> Jersey operations.
> Today it is much more spread out and sensible, the
> railroads that are government owned of course are
> relieved of this burden and the freight railroads
> have fought these taxes over the years too.
> CSX had a case in New York State a few short years
> back, I don't recall exactly what came of it but
> they were complaining about the high property
> taxes there at the time.
> Noel Weaver

Look at the history on the Empire State Rail Passenger Association's website for the history of CSX not wanting to make solely Amtrak based improvements in the Empire Corridor because of the adverse consequence of "raising the value" of the property and thus the property taxes CSX would pay for what it characterized as purely passenger improvements.

In San Bernardino County California, BNSF is far and away the largest taxpayer. The problem is in estimating what a strip of land 240 miles long (Needles to Riverside) is worth. The state Board of Equalization actually places a valuation on the railroads based on their net income, extent of landholdings, etc., and then the various county assessors calculate a property tax bill from that figure.
Because a railroad's property taxes are, at least somewhat, dependent on their income, there was little incentive to retire and remove trackage or structures just to save property taxes.
If you tear it down or abandon it, theoretically your company income will go up, at least a bit, and therefore your property taxes may also be affected.
All railroads are major property tax payers everywhere. It is difficult to say that their property tax bills are fair since not very many people own land like railroads.

TIOGA PASS

If you look on the AAR web site under "Railroad Tax Burdens", they state that the railroads paid $558 million in property taxes on their private ROW in 2006.

http://www.aar.org/IndustryInformation/BackgroundPapers.aspx

Note that it varies by state. Some states have eliminated all property taxes on railroad ROW, while other states still have significant taxes. New York is an example of a state with very high property taxes, but they are in the process of bringing they down over several years.

http://www.bcnys.org/whatsnew/2002/0211rail.htm

Since the above article was published, New York passed a tax reform bill that greatly reduces railroad property taxes, but over a number of years.

BRAtkinson Wrote:
-------------------------------------------------------
> Taxes are the number one reason that railroads
> were, in the past, hasty to rip out a 2nd main,
> tear down old buildings, etc. The local taxing
> authorities classed track, ties, sheds, everthing
> but the dirt as 'improvements' and since the
> railroad was not locally based, the towns knew
> they could charge whatever they felt like for
> these improvements!


This is still the case. The UP in Topeka, KS, recently removed some industry tracks after the industry was torn down. The track inspector I spoke to said it was specifically because reducing tax liability on "improved" property.

I believe I heard that the area around and including Cincinnati Union Terminal was being taxes of $1,000 a day in the '60's.

Yes-railroads pay property taxes. Thats why they remove a second track, an unused branch line or tear down a station. because then the ASSESSED VALUE goe DOWN because there are LESS improvements.
In Alameda County (CA) if you have a specific address for a RR building
you can check the assessors web site and see how much that particular parcel is taxed at (as long as the RR owns the land its on).
depending on the county will depend on whether you have enough to go on
by just having the address. In Contra Costa County (CA) you must have
an assessors parcel # to use it.
in Alameda county I can check out how much anyones property is assessed
at, all I need is the address.
Have fun

Conrail fought the state of New York for almost its entire existence over New York's high property taxes. It was a major reason much of the River Line was single-tracked, and they attempted to unload the Southern Tier line.

highball Wrote:
-------------------------------------------------------
> If you look on the AAR web site under "Railroad
> Tax Burdens", they state that the railroads paid
> $558 million in property taxes on their private
> ROW in 2006.
>
> http://www.aar.org/IndustryInformation/BackgroundP
> apers.aspx
>


Excellent! I missed that while I was reading through their website. Thanks for the link! And thanks also to everyone for your insights re: property tax that the railroads pay. I hope the project works out!

Thanks again, B

With the Penn Central bankruptcy it caused a hardship for many of the taxing districts as the taxed didn't get paid or the back taxes came much later. (I doubt that the full amount of back taxes were paid.)This was after the successer Penn Central company was set up to liquidate real estate and pay back taxes. The schools etc were very dependent on property taxes paid by railroads!

I believe Amtrak is exempted from property taxes by Federal law. Presumably most commuter authorities are too given that they're creations of the states they serve.

Dave