2025 - 2026 LEGISLATURE
LRB-1305/1
KP:cdc
2025 SENATE BILL 213
April 16, 2025 - Introduced by Senators QUINN, FEYEN and TOMCZYK, cosponsored
by Representatives NOVAK, TRANEL, ARMSTRONG, DONOVAN, FRANKLIN,
GUNDRUM, MELOTIK, MURSAU, PRONSCHINSKE and SWEARINGEN. Referred to
Committee on Agriculture and Revenue.
AN ACT to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g)
and 71.45 (2) (a) 10.; to create 71.07 (8t), 71.10 (4) (cu), 71.28 (8t), 71.30 (3)
(cu), 71.47 (8t), 71.49 (1) (cu) and 73.03 (78) of the statutes; relating to: a tax
credit for rail infrastructure modernization.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for railroads that make
rail infrastructure and railroad maintenance expenditures. Under the bill, a
claimant that is classified by the U.S. Surface Transportation Board as a class II or
class III railroad may claim a rail infrastructure modernization credit that is equal
to the sum of the following amounts:
1. Fifty percent of the qualified short line railroad maintenance expenditures
made by the railroad. This portion of the credit is limited to an amount equal to
$5,000 multiplied by the number of miles of railroad track owned or leased by the
railroad. The bill defines Xqualified short line railroad maintenance expendituresY
as gross expenditures for railroad infrastructure rehabilitation or maintenance
improvements located in this state.
2. Fifty percent of the railroad[s qualified new rail infrastructure
expenditures. This portion of the credit is limited to $2,000,000 per project. The
bill defines Xqualified new rail infrastructure expendituresY as expenditures for rail
1
2
3
4 2025 - 2026 Legislature
SENATE BILL 213
- 2 - LRB-1305/1
KP:cdc
SECTION 1
infrastructure and improvements in this state placed in service after December 31,
2024.
A claimant that owns or leases a rail siding, industrial spur, or industry track
may claim the portion of the credit described above for the claimant[s qualified new
rail infrastructure expenditures.
Before claiming a credit under the bill, a claimant must first apply to and
receive approval from the Department of Revenue to claim the credit. DOR may
approve up to $10,000,000 in total credits for qualified new rail infrastructure
expenditures for each tax year, and DOR must approve applications for credits on a
first-come, first-served basis.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SECTION 1. 71.05 (6) (a) 15. of the statutes is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5i), (5j), (5k),
(5r), (5rm), (6n), (8t), and (10) and not passed through by a partnership, limited
liability company, or tax-option corporation that has added that amount to the
partnership[s, company[s, or tax-option corporation[s income under s. 71.21 (4) or
71.34 (1k) (g).
SECTION 2. 71.07 (8t) of the statutes is created to read:
71.07 (8t) RAIL INFRASTRUCTURE MODERNIZATION CREDIT. (a) Definitions. In
this subsection:
1. XClaimantY means a person who files a claim under this subsection and
who is one of the following:
a. A railroad company located wholly or partly in this state that is classified by
the federal surface transportation board as a class II or class III railroad for the
taxable year to which the claim applies.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15 2025 - 2026 Legislature
SENATE BILL 213
- 3 - LRB-1305/1
KP:cdc
SECTION 2
b. An owner or lessee of a rail siding, industrial spur, or industry track on or
adjacent to a railroad in this state during the taxable year to which the claim
applies.
2. XQualified new rail infrastructure expendituresY means expenditures for
rail infrastructure and improvements in this state placed in service after December
31, 2024, including expenditures for the acquisition of right-of-way; engineering;
construction of new track such as industrial leads, switches, spurs, and sidings;
rehabilitation of existing inactive track to reinstate operation; loading dock
improvements; and transloading structures involved with servicing customer
locations or expansions.
3. XQualified short line railroad maintenance expendituresY means gross
expenditures for railroad infrastructure rehabilitation or maintenance
improvements located in this state, including but not limited to rail, tie plates, joint
bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings,
signs, safety barriers, crossing signals and gates, and related track structures.
(b) Filing claims. For taxable years beginning after December 31, 2024, and
before January 1, 2035, and subject to the limitations provided in this subsection, a
claimant may claim as a credit against the tax imposed under s. 71.02, up to the
amount of those taxes, all of the following:
1. An amount equal to 50 percent of the qualified short line railroad
maintenance expenditures made by the claimant during the taxable year to which
the claim relates if the claimant is classified by the federal surface transportation
board as a class II or class III railroad for the taxable year.
2. An amount equal to 50 percent of the qualified new rail infrastructure
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 4 - LRB-1305/1
KP:cdc
SECTION 2
expenditures made by the claimant during the taxable year to which the claim
relates.
(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified
short line railroad maintenance expenditures that are used to claim a tax credit
under federal law or that are funded by a federal or state grant.
2. The total amount of the credits under par. (b) 1. and ss. 71.28 (8t) (b) 1. and
71.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to
$5,000 multiplied by the number of miles of railroad track owned or leased by the
claimant in this state on December 31 of the taxable year to which the claim
applies.
3. The total amount of the credits under par. (b) 2. and ss. 71.28 (8t) (b) 2. and
71.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per
project application approved by the department.
4. No credit may be allowed under this subsection unless the claimant
submits an application to the department, at the time and in the manner
prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
5. Partnerships, tax-option corporations, and limited liability companies may
not claim a credit under this subsection, but the eligibility for, and the amount of,
the credit are based on their expenditures made under par. (b). A partnership, tax-
option corporation, or limited liability company shall compute the amount of the
credit that each of its partners, shareholders, or members may claim and shall
provide that information to each of them. Partners of a partnership, shareholders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 5 - LRB-1305/1
KP:cdc
SECTION 2
of tax-option corporations, and members of limited liability companies may claim
the credit in proportion to their ownership interest.
(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
credit under s. 71.28 (4), applies to the credit under this subsection.
2. If a credit computed under this subsection is not entirely offset against
Wisconsin income or franchise taxes otherwise due, the unused balance may be
carried forward and credited against Wisconsin income or franchise taxes
otherwise due for the following 5 taxable years to the extent not offset by these
taxes otherwise due in all intervening years between the year in which the
expenditure was made and the year in which the carry-forward credit is claimed.
(e) Transfer. Any person may sell or otherwise transfer the credit under par.
(b), in whole or in part, to another person who is subject to the taxes imposed under
s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and
submits with the notification a copy of the transfer documents, and the department
certifies ownership of the credit with each transfer. The transferor may file a claim
for more than one taxable year on a form prescribed by the department to compute
all years of the credit under par. (b) at the time of the transfer request. The
transferee may first use the credit to offset tax in the taxable year of the transferor
in which the transfer occurs, and may use the credit only to offset tax in taxable
years otherwise allowed to be claimed and carried forward by the original claimant.
SECTION 3. 71.10 (4) (cu) of the statutes is created to read:
71.10 (4) (cu) Rail infrastructure modernization credit under s. 71.07 (8t).
SECTION 4. 71.21 (4) (a) of the statutes is amended to read:
71.21 (4) (a) The amount of the credits computed by a partnership under s.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 6 - LRB-1305/1
KP:cdc
SECTION 4
71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
(5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8t), and (10) and passed through to partners
shall be added to the partnership[s income.
SECTION 5. 71.26 (2) (a) 4. of the statutes is amended to read:
71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5g), (5i), (5j), (5k), (5r),
(5rm), (6n), (8t), and (10) and not passed through by a partnership, limited liability
company, or tax-option corporation that has added that amount to the
partnership[s, limited liability company[s, or tax-option corporation[s income under
s. 71.21 (4) or 71.34 (1k) (g).
SECTION 6. 71.28 (8t) of the statutes is created to read:
71.28 (8t) RAIL INFRASTRUCTURE MODERNIZATION CREDIT. (a) Definitions. In
this subsection:
1. XClaimantY means a person who files a claim under this subsection and
who is one of the following:
a. A railroad company located wholly or partly in this state that is classified by
the federal surface transportation board as a class II or class III railroad for the
taxable year to which the claim applies.
b. An owner or lessee of a rail siding, industrial spur, or industry track on or
adjacent to a railroad in this state during the taxable year to which the claim
applies.
2. XQualified new rail infrastructure expendituresY means expenditures for
rail infrastructure and improvements in this state placed in service after December
31, 2024, including expenditures for the acquisition of right-of-way; engineering;
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 7 - LRB-1305/1
KP:cdc
SECTION 6
construction of new track such as industrial leads, switches, spurs, and sidings;
rehabilitation of existing inactive track to reinstate operation; loading dock
improvements; and transloading structures involved with servicing customer
locations or expansions.
3. XQualified short line railroad maintenance expendituresY means gross
expenditures for railroad infrastructure rehabilitation or maintenance
improvements located in this state, including but not limited to rail, tie plates, joint
bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings,
signs, safety barriers, crossing signals and gates, and related track structures.
(b) Filing claims. For taxable years beginning after December 31, 2024, and
before January 1, 2035, and subject to the limitations provided in this subsection, a
claimant may claim as a credit against the tax imposed under s. 71.23, up to the
amount of those taxes, all of the following:
1. An amount equal to 50 percent of the qualified short line railroad
maintenance expenditures made by the claimant during the taxable year to which
the claim relates if the claimant is classified by the federal surface transportation
board as a class II or class III railroad for the taxable year.
2. An amount equal to 50 percent of the qualified new rail infrastructure
expenditures made by the claimant during the taxable year to which the claim
relates.
(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified
short line railroad maintenance expenditures that are used to claim a tax credit
under federal law or that are funded by a federal or state grant.
2. The total amount of the credits under par. (b) 1. and ss. 71.07 (8t) (b) 1. and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 8 - LRB-1305/1
KP:cdc
SECTION 6
71.47 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to
$5,000 multiplied by the number of miles of railroad track owned or leased by the
claimant in this state on December 31 of the taxable year to which the claim
applies.
3. The total amount of the credits under par. (b) 2. and ss. 71.07 (8t) (b) 2. and
71.47 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per
project application approved by the department.
4. No credit may be allowed under this subsection unless the claimant
submits an application to the department, at the time and in the manner
prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
5. Partnerships, tax-option corporations, and limited liability companies may
not claim a credit under this subsection, but the eligibility for, and the amount of,
the credit are based on their expenditures made under par. (b). A partnership, tax-
option corporation, or limited liability company shall compute the amount of the
credit that each of its partners, shareholders, or members may claim and shall
provide that information to each of them. Partners of a partnership, shareholders
of tax-option corporations, and members of limited liability companies may claim
the credit in proportion to their ownership interest.
(d) Administration. 1. Subsection (4) (e), (g), and (h), as it applies to the credit
under sub. (4), applies to the credit under this subsection.
2. If a credit computed under this subsection is not entirely offset against
Wisconsin income or franchise taxes otherwise due, the unused balance may be
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 9 - LRB-1305/1
KP:cdc
SECTION 6
carried forward and credited against Wisconsin income or franchise taxes
otherwise due for the following 5 taxable years to the extent not offset by these
taxes otherwise due in all intervening years between the year in which the
expenditure was made and the year in which the carry-forward credit is claimed.
(e) Transfer. Any person may sell or otherwise transfer the credit under par.
(b), in whole or in part, to another person who is subject to the taxes imposed under
s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and
submits with the notification a copy of the transfer documents, and the department
certifies ownership of the credit with each transfer. The transferor may file a claim
for more than one taxable year on a form prescribed by the department to compute
all years of the credit under par. (b) at the time of the transfer request. The
transferee may first use the credit to offset tax in the taxable year of the transferor
in which the transfer occurs, and may use the credit only to offset tax in taxable
years otherwise allowed to be claimed and carried forward by the original claimant.
SECTION 7. 71.30 (3) (cu) of the statutes is created to read:
71.30 (3) (cu) Rail infrastructure modernization credit under s. 71.28 (8t).
SECTION 8. 71.34 (1k) (g) of the statutes is amended to read:
71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w),
(3wm), (3y), (4), (5), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8t), and (10) and passed
through to shareholders.
SECTION 9. 71.45 (2) (a) 10. of the statutes is amended to read:
71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5g), (5i),
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 10 - LRB-1305/1
KP:cdc
SECTION 9
(5j), (5k), (5r), (5rm), (6n), (8t), and (10) and not passed through by a partnership,
limited liability company, or tax-option corporation that has added that amount to
the partnership[s, limited liability company[s, or tax-option corporation[s income
under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47
(3), (3t), (4), (4m), and (5).
SECTION 10. 71.47 (8t) of the statutes is created to read:
71.47 (8t) RAIL INFRASTRUCTURE MODERNIZATION CREDIT. (a) Definitions. In
this subsection:
1. XClaimantY means a person who files a claim under this subsection and
who is one of the following:
a. A railroad company located wholly or partly in this state that is classified by
the federal surface transportation board as a class II or class III railroad for the
taxable year to which the claim applies.
b. An owner or lessee of a rail siding, industrial spur, or industry track on or
adjacent to a railroad in this state during the taxable year to which the claim
applies.
2. XQualified new rail infrastructure expendituresY means expenditures for
rail infrastructure and improvements in this state placed in service after December
31, 2024, including expenditures for the acquisition of right-of-way; engineering;
construction of new track such as industrial leads, switches, spurs, and sidings;
rehabilitation of existing inactive track to reinstate operation; loading dock
improvements; and transloading structures involved with servicing customer
locations or expansions.
3. XQualified short line railroad maintenance expendituresY means gross
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 11 - LRB-1305/1
KP:cdc
SECTION 10
expenditures for railroad infrastructure rehabilitation or maintenance
improvements located in this state, including but not limited to rail, tie plates, joint
bars, fasteners, switches, ballast, subgrade, roadbed, industrial leads, sidings,
signs, safety barriers, crossing signals and gates, and related track structures.
(b) Filing claims. For taxable years beginning after December 31, 2024, and
before January 1, 2035, and subject to the limitations provided in this subsection, a
claimant may claim as a credit against the tax imposed under s. 71.43, up to the
amount of those taxes, all of the following:
1. An amount equal to 50 percent of the qualified short line railroad
maintenance expenditures made by the claimant during the taxable year to which
the claim relates if the claimant is classified by the federal surface transportation
board as a class II or class III railroad for the taxable year.
2. An amount equal to 50 percent of the qualified new rail infrastructure
expenditures made by the claimant during the taxable year to which the claim
relates.
(c) Limitations. 1. No credit may be claimed under par. (b) 1. for any qualified
short line railroad maintenance expenditures that are used to claim a tax credit
under federal law or that are funded by a federal or state grant.
2. The total amount of the credits under par. (b) 1. and ss. 71.07 (8t) (b) 1. and
71.28 (8t) (b) 1. for a claimant for a taxable year may not exceed an amount equal to
$5,000 multiplied by the number of miles of railroad track owned or leased by the
claimant in this state on December 31 of the taxable year to which the claim
applies.
3. The total amount of the credits under par. (b) 2. and ss. 71.07 (8t) (b) 2. and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 12 - LRB-1305/1
KP:cdc
SECTION 10
71.28 (8t) (b) 2. for a claimant for a taxable year may not exceed $2,000,000 per
project application approved by the department.
4. No credit may be allowed under this subsection unless the claimant
submits an application to the department, at the time and in the manner
prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
5. Partnerships, tax-option corporations, and limited liability companies may
not claim a credit under this subsection, but the eligibility for, and the amount of,
the credit are based on their expenditures made under par. (b). A partnership, tax-
option corporation, or limited liability company shall compute the amount of the
credit that each of its partners, shareholders, or members may claim and shall
provide that information to each of them. Partners of a partnership, shareholders
of tax-option corporations, and members of limited liability companies may claim
the credit in proportion to their ownership interest.
(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
credit under s. 71.28 (4), applies to the credit under this subsection.
2. If a credit computed under this subsection is not entirely offset against
Wisconsin income or franchise taxes otherwise due, the unused balance may be
carried forward and credited against Wisconsin income or franchise taxes
otherwise due for the following 5 taxable years to the extent not offset by these
taxes otherwise due in all intervening years between the year in which the
expenditure was made and the year in which the carry-forward credit is claimed.
(e) Transfer. Any person may sell or otherwise transfer the credit under par.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 2025 - 2026 Legislature
SENATE BILL 213
- 13 - LRB-1305/1
KP:cdc
SECTION 10
(b), in whole or in part, to another person who is subject to the taxes imposed under
s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and
submits with the notification a copy of the transfer documents, and the department
certifies ownership of the credit with each transfer. The transferor may file a claim
for more than one taxable year on a form prescribed by the department to compute
all years of the credit under par. (b) at the time of the transfer request. The
transferee may first use the credit to offset tax in the taxable year of the transferor
in which the transfer occurs, and may use the credit only to offset tax in taxable
years otherwise allowed to be claimed and carried forward by the original claimant.
SECTION 11. 71.49 (1) (cu) of the statutes is created to read:
71.49 (1) (cu) Rail infrastructure modernization credit under s. 71.47 (8t).
SECTION 12. 73.03 (78) of the statutes is created to read:
73.03 (78) (a) To implement a program to approve applications for purposes of
ss. 71.07 (8t), 71.28 (8t), and 71.47 (8t). Application shall be made to the
department for each taxable year for which a credit is desired.
(b) 1. The department shall process applications under this subsection in the
order of receipt, and the department shall approve applications under this
subsection on a first-come, first-served basis.
2. The department may approve up to $10,000,000 in total credits under ss.
71.07 (8t) (b) 2., 71.28 (8t) (b) 2., and 71.47 (8t) (b) 2. for each taxable year.
(END)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21