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Railroad Maintenance and Improvement Tax Credit – KRS 141.385, 141.387


  • For taxable years beginning after December 31, 2009.

  • A nonrefundable credit against the taxes imposed by KRS 141.020 or 141.040, and 141.0401.

  • The credit shall be an amount equal to fifty percent (50%) of the qualified expenditures paid or incurred by an eligible taxpayer during the taxable year to maintain or improve railroads located in Kentucky.


  • An "eligible taxpayer" means the owner of any Class II or Class III railroad located in Kentucky, the transporter of property using the rail facilities of a Class II or III railroad in Kentucky, or any person that furnishes railroad-related property or services to a Class II or Class III railroad located in Kentucky.

  • The credit shall not exceed the product of $3,500 multiplied by:
    •  The sum of:
      • The number of railroad track miles in Kentucky owned or leased by the eligible taxpayer as of the close of the taxable year; and
      • The number of railroad track miles in Kentucky assigned to the eligible taxpayer by a Class II or Class III railroad.

  • The credit cannot be carried forward.

  • If expenditure by a taxpayer qualifies for credits under more than one of the provisions of KRS 141.385 (Railroad Maintenance and Improvement Credit) and 141.386 (railroad expansion or upgrade to transport fossil energy or biomass resources), the taxpayer may claim credit only under one of the sections.


    Use Form: Schedule RR-I 

Download the Taxpayer Bill of Rights

The Kentucky Department of Revenue conducts work
under the authority of the Finance and Administration Cabinet.

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