In the article linked below, the state of IL may start taxing RR fuel. How badly would this impact RR museums like IRM? Do any other states tax RR fuel? If so, how does it impact the museum operations in those states?

Boyd

IL Fuel Tax
bowens@rypn.org

> In the article linked below, the state of IL
> may start taxing RR fuel. How badly would
> this impact RR museums like IRM? Do any
> other states tax RR fuel? If so, how does it
> impact the museum operations in those
> states?

I'm sure it would have an impact, but I can't imagine its more than a marginal one. For most museums salary, facilities maintenance, insurance, membership service (printing, mailing), and collections care/conservation/resotration are all going to be way bigger line items than fuel. Not to say that it isn't painful, but it's hardly the dominant line in the budget.

eledbetter@rypn.org

Then what does it mean to be "tax-exempt"?

G. Mark

Look at our Revamped Website
aw90@comcast.net

> Then what does it mean to be
> "tax-exempt"?

What a darn good point. Doh! Yes, one should be able to flash the state tax exemption at the point of purchase.

eledbetter@rypn.org

Good point I should have thought of. As non-profit organizations, museums shouldn't be affected. Tourist operation that aren't tax-exempt might be affected though. What about AMTRAK excursions? Will the 261 group have to pay extra for fuel when they run in IL as part of the Grand Excursion this year? Does AMTRAK as a federal entity have to pay state taxes?

Boyd


bowens@rypn.org

As a professional student of Diesel-fuel taxation, this is one of the wildest schemes I've heard of yet (proposed Illinois 21.5-cent-per-gallon tax on off-road Diesel fuel use). My guess is that this is political posturing, and that the governor won't risk hitting construction companies, farmers, railroads, and other industries with this tax. So far as I know, no state taxes motor fuels except for road use (not counting the six states, including Illinois, that have sales taxes on Diesel fuel transactions).

The tax would be impossible to audit - remember that Diesel is the same as (untaxed) heating fuel. Railroads (except in-state short lines and museums) would respond by moving fuel racks out of Illinois, unless the state imposed a complicated reporting mechanism and imposed the tax on the basis of locomotive-miles in Illinois, which might raise Commerce Clause questions.

My guess is that tax-exempts would be exempt from this tax, too, insomuch as it's not a road-use fee. The only thing I can say for sure about this one is that the 261, or any other coal-burning operation, would have nothing to fear from this tax.

- Aarne Frobom

Oops, I guess I did make my post sound like I was asking about 261's fuel. I was thinking about fuel for the AMTRAK diesel(s) providing back-up protection power and HEP to the passenger cars.

Boyd

bowens@rypn.org

> snip The tax would be impossible to audit -
> snip - Aarne Frobom

Not if they handled it the way they do the trucking industry. We are required to track average miles per gallon of a vehicle. We then must report to the state how many miles we ran within that state for the year and pay or show we paid through fuel purchases the tax for the fuel USED in their state whether it was purchased there or not. Not only do we pay tax on fuel twice, but we have the additional administration costs of tracking it.

For example if my truck gets 5 mpg and I buy 200 gallons of fuel in Indiana and pay 20 cents per gallon tax; I've already paid $40.00 in tax on that fuel. Now suppose I operated 200 miles in Illinois and their fuel tax is 28 cents I must pay tax on the fuel used in their state. At 5 mpg I use 40 gallons and so I must pay the state $11.20 in fuel tax. The kicker is that I don't get a refund on the additional taxes paid in Indiana! At least I didn't when I drove.

The state can do the same for the railroads whether they purchase the fuel elsewhere or not; they may still have to pay tax on fuel used in their state.

disclaimer- I used the word "can"; they may or may not do it this way. Either way, since the railroads operate on private property I personally don't believe to tax this fuel usage is right; but that's just my opinion. That and a dollar will get you a soda at most convenient stores.

G

greg@skittercreek.com

You can probably bet that tax-exempts would not be exempted, remember that they're not exempted from taxes on gasoline purchases.

On another historical note, remember the fuel tenders that Burlington Northern was running before they figured that tankcars don't stand up to the buffeting between locomotives? I understand that they were a way to dodge high fuel taxes in one of the states that their route crossed.

schwartzsj@juno.com

> The tax would be impossible to audit -
> remember that Diesel is the same as
> (untaxed) heating fuel.

Unfortunately, auditability is usually way down the list of concerns for politicians, who ready fire aim.

superheater@rrmail.com

The International Fuel Tax Agreement (IFTA) works fine for truckers, who are required to tabulate where they've been for road-tax purposes (truck license plates work this way, too). But trucks don't M.U. I don't expect Illinois would get away with requiring the railroads to tabulate how many units were on each train during each trip into Illinois, or how many hours each unit spent idling in Homewood or Clearing. I imagine this would be an increase in Illinois' sales tax (and other states could try the same thing as they run short of money, so watch your state capitols).

On a more cheerful and coherent note, the 4.3-cent-per-gallon federal tax on railroad Diesel fuel for the U.S. General Fund is almost certain to be repealed as part of the federal highway bill now in conference committee. I presume all railroad users, including museums, pay this excise tax.

And for those who use this particular class of funding, the Surface Transportation "Enhancement" program has made it through both Houses in the highway bill, too.

- Aarne Frobom