Locomotive Fuel Gross Receipts & Compensating Tax Deduction

Receipts from the sale of fuel to a common carrier to be loaded or used in a locomotive engine are deductible from gross receipt tax due.

The value of the fuel to be loaded or used by a common carrier in a locomotive engine is deductible when computing the compensating tax due.

“Locomotive engine” is defined as a wheeled vehicle consisting of a self-propelled engine that is used to draw trains along railway tracks. To be eligible, the fuel sold must be used or loaded by a common carrier that:

  1. After July 1, 2011, made a capital investment of $100 million or more in new construction or renovations at the railroad locomotive refueling facility in which the fuel is loaded or used; or
  2. On or after July 1, 2012, made a capital investment of $50 million or more in new railroad infrastructure improvements, including railroad facilities, track, signals, and supporting railroad network, located in New Mexico; provided that the new railroad infrastructure improvements are not required by a regulatory agency to correct problems, such as regular or preventive maintenance, specifically identified by that agency as requiring necessary corrective action.