SB 357, as introduced, Hall. Private railroad car tax.
The California Constitution authorizes the Legislature to classify personal property for differential taxation or for exemption by means of a statute approved by a 2⁄3 vote of the membership of each house. Under the Private Railroad Car Tax Law, the State Board of Equalization assesses and taxes private railroad cars operated upon railroads in this state. In making an assessment, the board is required to determine the average number of each class of private railroad cars physically present in the state in the calendar year immediately preceding the fiscal year in which the tax is imposed upon the basis of car days.
This bill would instead require the board, in making the assessment, to determine the physical presence of private railroad cars in the state in the calendar year immediately preceding the fiscal year in which the tax is imposed upon the basis of mileage.
Existing law also requires the board, in making the above assessment, to value the cars by class based on the owner’s acquisition cost, less depreciation, and sets forth the manner in which depreciation is calculated for each class of cars, as specified.
This bill would instead require the board, in making the assessment, to value the cars based on the owner’s acquisition cost, including additions and betterments, less depreciation, and would revise the manner in which the depreciation is calculated, as specified.
Existing law requires the board to exclude from the California factor car mileage, car days, or other data that occurs while cars are not qualified for revenue service and are in a repair facility in the state, as specified. Existing law defines the term “class of private railroad cars” for these purposes.
This bill would delete the definition of the term “class of private railroad cars” and would eliminate the requirement that the board exclude from the California factor car mileage, car days, or other data that occurs while cars are not qualified for revenue service and are in a repair facility in the state.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 11206 of the Revenue and Taxation Code
2 is repealed.
“Class of private railroad cars” means the Association
4of American Railroad’s, or successor organization’s, one letter
5alpha component of its car type codes as contained in that
6organization’s Exhibit D of the UMLER specification manual or
7successor exhibit.
Section 11292 of the Revenue and Taxation Code is
9amended to read:
In making the assessment, the board shall value the
11carsbegin delete by classend delete based on the owner’s acquisition cost,begin insert including
12additions and betterments,end insert less depreciation. The depreciation
13shall be computed for these enumerated Association of American
14Railroad’s, or successor organization’s, car type groups on a
15straight-line basis with the indicated depreciable life schedules
16with a maximum of 80 percent depreciation allowed.begin insert Acquisition
17costs, which includes additions and betterments, means the
18expenditures required to be capitalized by generally accepted
19accounting principles.end insert
20(a) Stack cars (alpha S): 22begin delete years minus the age at acquisition.end delete
21begin insert years.end insert
22(b) Lightweight, low profile intermodal cars (alpha Q): 22begin delete years begin insert years.end insert
23minus the age at acquisition.end delete
24(c) Flat cars (alpha F): 22begin delete years minus the age at acquisition.end delete
25begin insert years.end insert
P3 1(d) Conventional intermodal cars (alpha P): 22begin delete years minus the begin insert years.end insert
2age at acquisition.end delete
3(e) Vehicular flat cars (alpha V): 22begin delete years minus the age at begin insert years.end insert
4acquisition.end delete
5(f) All other cars (all other alphas): 25begin delete years minus the age at begin insert years.end insert
6acquisition.end delete
7(g) Betterments: the remaining depreciable life of the car to
8which the betterment is applied.
9Acquisition cost is defined as the expenditures required to be
10capitalized by generally accepted accounting principles.
Section 11293 of the Revenue and Taxation Code is
12amended to read:
In making an assessment, the board shall determine the
14begin delete average numberend deletebegin insert physical presenceend insert ofbegin delete each class ofend delete private railroad
15carsbegin delete physically presentend delete inbegin delete theend deletebegin insert thisend insert state in the calendar year
16immediately preceding the fiscal year in which the tax is imposed
17upon the basis ofbegin delete car days.end deletebegin insert mileage.end insert The board shall multiply the
18begin delete average numberend deletebegin insert ratioend insert so determined by the valuebegin delete of a car of that as determined under Section 11292 and use the product for
19classend delete
20the assessment of the cars.
Section 11294 of the Revenue and Taxation Code is
22repealed.
In determining the averages required in Section 11293,
24the board shall exclude from the California factor car mileage, car
25days or such other data which occurs while cars are not qualified
26for revenue service and are in a repair facility in this state requiring
27and undergoing or awaiting remodeling, overhaul, renovation,
28conversion or repair which necessitates total labor in excess of 10
29man-hours.
30Car days excluded pursuant to this section shall not exceed 90
31days per car unless the claimant provides substantiation of the
32necessity for the additional days in such form as prescribed by the
33board.
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