Fillable Form 1028 - Annual Property Report - 2012 (Page 10 of 12) in pdf

Instructions for Tax Credit for Maintenance and Improvement of Right of Way

Sec. 13 of PA 282 of 1905, as amended, (more specifically MCL 207.13(2) and MCL 207.13a(5)(b)(ii)), allows credit

against the tax imposed, for eligible expenses incurred in the State of Michigan by railroad companies for maintenance or

improvement of rights of way, including those items, except depreciation, in the official maintenance-of-way and capital

track accounts of the railroad company in this state during the calendar year immediately preceding the statutory due date

of this report, but not to exceed the total liability for the tax under this act.

Additional Statutory Requirements for Eligibility (MCL 207.13(2) - (5))

In order to be eligible for the tax credit for maintenance and improvement of rights of way, the railroad companies must

complete and file [3 COPIES OF] an annual report with the State Tax Commission that includes the following:

1. Detailed data of right of way work conducted in this state during the past calendar year separated by costs of labor and

materials on each project and itemized in the following categories:

(a) Miles of track laid

(b) Tons of new ballast installed

(d) Miles of track surfaced

(e) Signals installed

(f) Under drainage work done

2. The number of notices of violation from the railway inspectors by railroad section,

3. A detailed account of the location and nature of the work defined by railroad section or mile posts surrounding the work

area plus the county, city, or township in which the work was performed,

4. Demonstration that the highest priority of expenditures for the maintenance and improvement of rights

way has been given to rail lines that handle hazardous materials, especially those that are located in urban or residential

areas, and detailed data on the tonnages of hazardous materials handled in relation to tonnages of other traffic handled

over the rail line for which a tax credit is being applied.

In addition, the company must grant to another railroad company, upon application by the latter, trackage rights over its

line for trains, providing that the train operations do not interfere with the movement of Michigan freight using the same

trackage, if operations can be accomplished safely in the opinion of the grantor and if trackage arrangements and train

operations are approved by the interstate commerce commission.

***NOTE*** Filing of the credit application does not relieve you of the requirement of filing 3 copies of the above

defined report with the State Tax Commission. You are still required to provide the above information in a

separate report.

What expenses are eligible for credit against the tax levied? MCL 207.13(2)

Eligible Expenses:

1. Eligible expenses must have been incurred during the calendar year immediately preceding the statutory due date of

this report.

2. Eligible expenses must have been incurred in the State of Michigan.

3. Examples of Eligible Capital Expenses for Road and Equipment include, but are not limited to items from the following

categories:

(1) Engineering exp. directly related to R & E Property

(23) Wharves and Docks

(3) Other Right-of-Way Expenses

(24) Coal and Ore Wharves

(4) Grading

(25) TOFC/COFC Terminals

(5) Tunnels and Subways

(26) Communication Systems

(6) Bridges, trestles, and culverts

(27) Signals and Interlockers

(7) Elevated Structures

(37) Roadway Machines

(8, 9, 10, 11) Ties, Rails and other Track Material

(38) Roadway small tools

(12) Track Laying and Surfacing

(39) Public Improvements - Construction

(13) Fences, Snowsheds, and Signs

(43) Other Expenses - Road

(17) Roadway Buildings (portion housing MOW equipment and engineering)

Form 1028 - Annual Property Report - 2012 Page 10

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