Colorado Introduces Tax Incentive for Rail Development to Boost Economic Expansion in Coal Region Transition Regions
The Colorado government has unveiled a new initiative, the Freight Rail Tax Credit program, aimed at revitalizing freight rail lines and stimulating economic growth in coal-dependent communities. Managed by the Colorado Office of Economic Development and International Trade (OEDIT), the Colorado Department of Transportation (CDOT), and the Office of Just Transition (OJT), the program has so far distributed over $11 million in funding to support new business development and job creation, with nearly $8 million going to northwest Colorado.
The Freight Rail Tax Credit program is designed to diversify economic activities in areas impacted by coal plant closures, promoting local job creation and economic growth away from coal dependence. The initiative focuses on communities in the Yampa Valley, Moffat, Rio Blanco, and Routt counties, with the Union Pacific’s Craig Branch Line as its initial focus.
The tax credit covers a broad range of expenses, including railroad fees, transloading costs, and significant capital outlays for rail infrastructure improvements. Qualified businesses can receive up to a 75% tax credit on eligible rail-related expenses, with a cap of $5 million statewide annually from 2025 through 2036.
Governor Jared Polis emphasized that the initiative will encourage the continued use of existing rail lines, increase business activity in northwest Colorado, and set the stage for passenger rail. Representative Meghan Lukens noted that increased rail revenue from freight makes passenger rail more affordable and opens doors for business growth on the Western Slope. State Senator Dylan Roberts stated that the Freight Rail Tax Credit brings new jobs and makes passenger rail from Craig to Denver a realistic goal by the end of the decade.
The Freight Rail Tax Credit is a key component of the ongoing state effort to make passenger rail from Craig to Denver a realistic goal and stimulate business growth on the Western Slope. Local governments in Craig, Hayden, Routt County, and Steamboat Springs have passed resolutions in favor of the Mountain Rail project and committed to coordinating on future station development.
The Mountain Rail project, a part of the larger state effort, has received support from these local governments for future station development. The official program website provides more details about the Freight Rail Tax Credit and eligibility. Businesses that transport freight on the Craig Branch Line are eligible for the program.
CDOT will conduct annual evaluations to determine if additional freight rail lines should be added to the program. The Freight Rail Tax Credit program is part of a larger, ongoing state effort to ease the transition for coal-dependent communities, with the goal of creating a more diverse and sustainable economy for all of Colorado. For more details about the Freight Rail Tax Credit and eligibility, visit the official program website.
- The Freight Rail Tax Credit program, supported by the Colorado government, is intended to support businesses in coal-dependent communities by offering tax credits for rail-related expenses, encouraging the continued use of existing rail lines, and stimulating economic growth, especially in northern Colorado.
- As part of the larger state effort, the Mountain Rail project has garnered support from local governments in Craig, Hayden, Routt County, and Steamboat Springs for future station development, with the hope of making passenger rail from Craig to Denver a reality by the end of the decade.
- The Freight Rail Tax Credit program, managed by the Colorado Office of Economic Development and International Trade (OEDIT), the Colorado Department of Transportation (CDOT), and the Office of Just Transition (OJT), is not only designed to bring new jobs but also to help create a more diverse and sustainable economy in Colorado, reducing its dependence on coal.
