Notice2022-11970
2021 Tax Information for Use in the Revenue Shortfall Allocation Method
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 3, 2022
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 87 Issue 107 (Friday, June 3, 2022)</title>
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[Federal Register Volume 87, Number 107 (Friday, June 3, 2022)]
[Notices]
[Pages 33866-33867]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11970]
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SURFACE TRANSPORTATION BOARD
[Docket No. EP 682 (Sub-No. 13)]
2021 Tax Information for Use in the Revenue Shortfall Allocation
Method
The Board is publishing, and providing the public an opportunity to
comment on, the 2021 weighted average state tax rates for each Class I
railroad, as calculated by the Association of American Railroads (AAR),
for use in the Revenue Shortfall Allocation Method (RSAM).
The RSAM figure is one of three benchmarks that together are used
to determine the reasonableness of a challenged rate under the Board's
Simplified Standards for Rail Rate Cases, EP 646 (Sub-No. 1), slip op.
at 10 (STB served Sept. 5, 2007),\1\ as further revised in Simplified
Standards for Rail Rate Cases--Taxes in Revenue Shortfall Allocation
Method (Simplified Standards--Taxes in RSAM), EP 646 (Sub-No. 2) (STB
served Nov. 21, 2008). RSAM is intended to measure the
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average markup that the railroad would need to collect from all of its
``potentially captive traffic'' (traffic with a revenue-to-variable-
cost ratio above 180%) to earn adequate revenues as measured by the
Board under 49 U.S.C. 10704(a)(2) (i.e., earn a return on investment
equal to the railroad industry cost of capital). Simplified Standards--
Taxes in RSAM, EP 646 (Sub-No. 2), slip op. at 1. In Simplified
Standards--Taxes in RSAM, EP 646 (Sub-No. 2), slip op. at 3, 5, the
Board modified its RSAM formula to account for taxes, as the prior
formula mistakenly compared pre-tax and after-tax revenues. In that
decision, the Board stated that it would institute a separate
proceeding in which Class I railroads would be required to submit the
annual tax information necessary for the Board's annual RSAM
calculation. Id. at 5-6.
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\1\ Aff'd sub nom. CSX Transp., Inc. v. STB, 568 F.3d 236 (D.C.
Cir. 2009), vacated in part on reh'g, 584 F.3d 1076 (D.C. Cir.
2009).
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Pursuant to 49 CFR 1135.2, AAR is required to annually calculate
and submit to the Board the weighted average state tax rate for each
Class I railroad for the previous year. On May 26, 2022, AAR filed its
calculation of the weighted average state tax rates for 2021, listed
below for each Class I railroad:
Weighted Average State Tax Rates
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2021 2020
Railroad (percent) (percent) % Change
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BNSF Railway Company................... 5.068 5.119 -0.051
CSX Transportation, Inc................ 5.010 5.101 -0.091
Grand Trunk Corporation................ 7.904 8.124 -0.220
The Kansas City Southern Railway 5.164 5.139 0.025
Company...............................
Norfolk Southern Combined Railroad 5.671 5.713 -0.042
Subsidiaries..........................
Soo Line Corporation................... 7.827 8.122 -0.295
Union Pacific Railroad Company......... 5.451 5.598 -0.147
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Pursuant to 49 CFR 1135.2(b), notice of AAR's submission will be
published in the Federal Register. Any party wishing to comment on
AAR's calculation of the 2021 weighted average state tax rates should
file a comment by July 5, 2022. See 49 CFR 1135.2(c). If any comments
opposing AAR's calculations are filed, AAR's reply will be due by July
25, 2022. Id. If any comments are filed, the Board will review AAR's
submission, together with the comments, and serve a decision within 60
days of the close of the record that either accepts, rejects, or
modifies AAR's railroad-specific tax information. Id. If no comments
are filed by July 5, 2022, AAR's submitted weighted average state tax
rates will be automatically adopted by the Board, effective July 6,
2022. Id.
It is ordered:
1. Comments on AAR's calculation of the 2021 weighted average state
tax rates for the Class I railroads are due by July 5, 2022. If any
comments opposing AAR's calculations are filed, AAR's reply is due by
July 25, 2022.
2. If no comments are filed, AAR's calculation of the 2021 weighted
average state tax rates for each Class I railroad will be automatically
adopted by the Board, effective July 6, 2022.
Decided: May 31, 2022.
By the Board, Scott M. Zimmerman, Acting Director, Office of
Proceedings.
Kenyatta Clay,
Clearance Clerk.
[FR Doc. 2022-11970 Filed 6-2-22; 8:45 am]
BILLING CODE 4915-01-P
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