2025 Tax Information for Use in the Revenue Shortfall Allocation Method

Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Surface Transportation Board [Docket No. EP 682 (Sub-No. 17)] The Board is publishing, and providing the public an opportunity to comment on, the 2025 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 average markup that the railroad would need to collect from all of its “potentially captive traffic” (traffic with ( printed page 34717) 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 stat…