Michigan 1028 PDF Form

1028 (Rev. 11-11)

State of Michigan

State Tax Commission

ANNUAL PROPERTY REPORT

For Year Ended December 31, 2011

State Assessed Railroads

This report is issued under Michigan Public Act 282 of 1905, as amended. Filing of this report is mandatory. There can be only one authorized contact person for each company. Companies with annual gross receipts greater than $1,000,000 are required to file this report on or before March 31. Companies with annual gross receipts equal to or less than $1,000,000 are required to file this report on or before March 15. A company failing to file a complete report by the applicable due date shall be subject to a fine of $500 per day.

Instructions for completion and filing options are available on pages 9-12 of this report.

Notary

Printed name of President, Secretary, Superintendent or Chief Officer under whose direction this report was prepared.

By my signature below, I certify that the information (including any attachments) in this report is complete and correct to the best of my knowledge and belief.

Signature ________________________________________________Title __________________________________Date _________________________

Subscribed and sworn to before me this ____________________________ day of _____________________________________, _______________.

Has your company experienced any name changes, acquisitions, or sales during the calendar year immediately preceding the statutory due date of this report.

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Schedule 1, Statement of Total Cost of Rolling Stock Owned or Leased by Year of Acquisition (Includes Locomotives, Freight Cars, Passenger Cars, Highway and Work Equipment)

Schedule 1 Total True Cash Value

Schedule 2, Investment in Road Property Used in Transportation Service with Additions and Retirements for the Year (Michigan Only)

If your prior year plant ending balance is not equivalent to the amount in Column A that was carried forward from last year’s report, please indicate the revised amount and provide an explanation.

Revised Column A: _________

Note: Inventory is exempt from assessment. Inventory does not include personal property under lease or principally intended for lease or rental (operating), rather than sale. Property allowed a cost recovery allowance or depreciation under the Internal Revenue Code is not inventory. Motor vehicles registered with the Michigan Secretary of State on Tax Day (December 31st) are exempt. Non-registered motor vehicles and equipment attached to motor vehicles which is not used while the vehicle travels on the highway are assessable. Computer software, if the purchase was evidenced by a separate invoice amount and if the software is commonly sold separately, is exempt.

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Schedule 3

A. Interest Paid on Debt From Railway Operations (National)

B. Total Net Operating from Railway Operations (National)

Schedule 4, Statement of Allocation Factors

Note: "National" includes all North American Activity (U.S., Canada, and Mexico), "Michigan" only includes those items attributable to the State of Michigan.

Schedule 5, Sales and Transfers of Car Marks

Did any sales or transfers of car marks occur during the calendar year immediately preceding the statutory due date of this report?

If Yes, describe any sales or transfers that occurred.

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

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Schedule 6, Statement of Railcar Mileage Traveled Over Track Operated by your Company (itemize by Car Mark)

Schedule 7, Real Property

Have there been any changes (additions or losses) to your Real Property in the calendar year immediately preceding the statutory filing date of this report?

If yes, please describe losses and/or additions in box below:

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2012

Application for Tax Credit for Maintenance and Improvement of Rights of Way

Section 13 of PA 282 of 1905, as amended allows credit for eligible expenses incurred in the State of Michigan by railroad companies for maintenance or improvement of rights of way, including those items, except depreciation, in the official maintenance-of-way and capital track accounts of the railroad company in this state during the calendar year immediately preceding the statutory due date of this report, but not to exceed the total liability for the tax under this act.

Eligibility Requirements

In order to be eligible for the tax credit for maintenance and improvement of rights of way under MCL 207.13(2), the railroad companies must fulfill the statutory requirements detailed in Section 13 of PA 282 of 1905 (MCL 207.13(3)). In addition to providing the requested summary information on this application for credit, each company must complete and file [3 copies of] the report described in Section 13 with the State Tax Commission that includes, but is not limited to, detailed information of the nature and location of expenses. A summary of the eligibility and reporting requirements are listed in the attached instructions on pages 11-13.

Eligible and Non-Eligible Expenses

Examples of Eligible and Non-Eligible Expenses are listed in the attached instructions on pages 11-13.

Maximum Credit Available

The maintenance of way expense credits are not refundable or deferrable. Expenses in excess of a company's property tax liability are not eligible for credit against prior or subsequent years' liability.

***NOTE*** Filing of this credit application does not relieve the company of the statutory requirement of filing [3 copies] of the detailed expense report described in Section 13(3). You are still required to provide that to the State Tax Commission at the following address:

Company Name

Eligibilty

Has your company incurred eligible expenses, and submitted three (3) copies of the required expense report as described above?

If Yes, please enter total eligible expenses below.

If No, you are NOT ELIGIBLE for credit. DO NOT SUBMIT EXPENSES.

Total Eligible Expenses for Maintenance and Improvement of Rights of Way in Michigan which you have reported in the above described report.

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2012

Application for Tax Credit for Maintenance and Improvement

of Qualified Rolling Stock in Michigan

Section 13a of Public Act 282 of 1905, as amended, allows a credit for eligible expenses incurred in the State of Michigan by railroad and car companies for maintenance or improvement of eligible companies' qualified rolling stock.

Eligible Company is defined as:

Railroad companies, union station and depot companies, sleeping car companies, express companies, car loaning companies, stock car companies, refrigerator car companies, fast freight line companies, and all other companies owning, leasing, running, or operating any freight, stock, refrigerator, or any other cars not the exclusive property of a railroad company paying taxes upon its rolling stock under this act, over or upon the line or lines of any railroad in this state.

Eligible Expenses are expenses for repairs and maintenance that satisfy all of the following criteria:

1.Eligible expenses must have been incurred during the calendar year immediately preceding the statutory due date of this report.

2.Eligible expenses must have been incurred in the State of Michigan.

3.Eligible expenses must be made for the maintenance or improvement of rolling stock which are subject to taxation by the State under PA 282 of 1905 as amended.

Examples of Eligible and Non-Eligible Expenses are listed in the attached instructions.

Maximum Credit Available:

This credit is not refundable or deferrable. Expenses in excess of a company's property tax liability are not eligible for credit against prior or subsequent years' liability.

Company Name

Eligibility

Are you an "eligible company" which has incurred expenses that satisfy ALL of the requirements listed above?

If Yes, please enter total eligible expenses below.

If No, you are NOT ELIGIBLE for credit. DO NOT SUBMIT EXPENSES.

Total Eligible Expenses for Maintenance and Improvement of Qualified Rolling Stock in Michigan (include labor, material, overhead, and payments to others for work done).

$

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Instructions for Completion of the Annual Report by State Assessed Railroads

Who must file this report? (MCL 207.6)

All railroad companies, union station and depot companies, and switching and terminal companies operating in the State of Michigan pursuant to Section 6 of PA 282 of 1905.

When is this report due? (MCL 207.6)

If your annual gross receipts exceed $1,000,000, this report is due by March 31st.

If your annual gross receipts do not exceed $1,000,000, this report is due by March 15th.

How to submit this report:

This report may be submitted electronically or mailed in paper format. If you wish to submit this form electronically, please visit the following web site at www.michigan.gov/stateassessedproperty or you may call (517) 241-4338 for more information on how to file electronically. Any company which desires to take advantage of the new online process, will be able to request an individual secure Personal Identification Number (PIN) by filling out Treasury form 4435. Once the Personal Identification Number (PIN) is issued, the company can use that PIN to access the site for submitting their Annual Property Report and any applicable credit applications online. The company can also use the PIN to view calculation worksheets and tax notices, once all the processing is complete. The secure PIN protects the account, and restricts access so that only the person which the company authorizes can access or view the information submitted to the state.

If submitting this form by mail, please complete and sign the declaration on page one and send the entire completed form to:

What property is subject to taxation? (MCL 207.5)

The term "property having a situs in this state", includes all property, real and personal, of the persons, corporations, companies, co-partnerships and associations enumerated in the act, which is owned, used and occupied by them within the limits of this state, and also such proportion of their rolling stock, cars, and other property as is used partly within and partly without this state as provided by PA 282 of 1905.

Schedule 1

List all rolling stock which is owned or leased by you. List the number of units reported as well as reportable current year costs. Property must be listed at its full original cost new, in the year that it was new. If the original/new acquisition cost of a railcar that was initially purchased by another company can be obtained, that information must be reported. If the original/new acquisition cost of a railcar that was initially purchased by another company cannot be obtained, then the original/new acquisition cost shall be equal to the subsequent price paid by the reporting company upon acquiring the used railcar. All betterments, including capital improvements, mandated betterments, capital upgrades, safety features, and mandated repairs should be reported in the year the expenditure is booked as a fixed asset.

The "Costs Reported Prior Year", "Losses", "Additions", and "True Cash Value" columns are for Assessment and Certification Division (ACD) use only. To view the values and calculations entered by the Assessment and Certification Division, please fill out form 4435 to obtain a Personal Identification Number (PIN) for access to the online reporting form available at www.michigan.gov/taxes (please see "How to submit this report" section above for specific website location). Tentative Values will be electronically posted on or about May 15th, and Final Values will be electronically posted on or about June 15th.

Schedule 2

This is to be submitted by all railroads and calls for summary data relating to investment for the company(s) properties in Michigan. Investment in account 732 (improvements on leased property) shall also be reported on Schedule 2. The "Previous Year Plant Balance" column is for Assessment and Certification Division office use only. List any retirements that have occurred during the calendar year immediately preceding the statutory due date of this report. List the accumulated depreciation for those retirements in the column designated.

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List any expenditures for additions that occurred during the calendar year immediately preceding the statutory due date of this report. Exclude locally-assessed property, erosion control property, and property funded by the Michigan Department of Transportation. List the accumulated first year depreciation for those additions in the column designated. Inventory is exempt from assessment. Inventory does not include personal property under lease or principally intended for lease or rental, rather than sale. Property allowed a cost recovery allowance or depreciation under the Internal Revenue Code is not inventory. Non-registered motor vehicles and equipment attached to motor vehicles which is not used while the vehicle travels on the highway are assessable. Computer software, if the purchase was evidenced by a separate invoice amount and if the software is commonly sold separately, is exempt.

In the Accumulated Depreciation column, list the accumulated depreciation for assets in place at year end.

List the balance of costs at calendar year end (December 31st). The "True Cash Value" column is for Assessment and Certification division office use only.

List the current year construction in progress. Report all costs that have been incurred including overheads, installation costs incurred, sales tax and freight. Reporting of costs should be separated by project. Property which is placed in service on or before December 31st is considered placed in service that year and should be entirely reported on the line which represents the year that it was considered placed in service. Similarly, the cost of all assets must be reported as acquired in the year that they were placed in service, rather than the year of purchase, if those years differ. The adjusted construction in progress and the Schedule 2 True Cash Value will be calculated by the Assessment and Certification Division.

Schedule 3

A.Enter the Total Interest Paid to service debt to finance railway operations. Interest must be for short term and long term debt. The columns provide for the amounts from the last four years. The phase-in of the interest in the valuation calculation based on the income approach, began with the 2011 tax year.

B.Enter the Total Net Operating Income from Railway Operations. The columns provide for the amounts reported from the last four years.

Schedule 4

If your company's property (whether owned or leased) is used entirely within the State of Michigan, you are not required to provide allocation information. If your company's property (whether owned or leased) is used partly within and partly without the State of Michigan, provide the allocation information based on the system as a whole, and the portion attributable to Michigan. For further details on reporting specifications, consult the Uniform System of Accounts for Railroad Companies. (49 CFR 1201 et.seq.)

Schedule 5

Please check the appropriate box indicating whether any sales or transfers of car marks have occurred in the calendar year immediately preceding the statutory due date of this report. If you select yes, please describe any sales and transfers of car marks that occurred.

Schedule 6

Enter the total annual mileage traveled during the calendar year immediately preceding the statutory due date of this report, over track that you operate (whether owned or leased). Please provide the mileage by individual car mark.

Schedule 7

Indicate whether there have been any changes to your real property as compared to the prior year’s information and provide information about any changes in the reporting box.

Losses to Real Property

Losses mean the decrease in value which has not been reflected in the assessment unit’s immediately preceding year’s assessment roll. Losses include removal or destruction of real property, newly exempt property, or newly contaminated property.

Additions to Real Property

Additions mean an increase in value which has not been reflected on the assessment unit’s immediately preceding year’s assessment roll. Additions include omitted property, new or replacement construction, and increases in value due to new public services and/or contamination remediation.

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Instructions for Tax Credit for Maintenance and Improvement of Right of Way

Sec. 13 of PA 282 of 1905, as amended, (more specifically MCL 207.13(2) and MCL 207.13a(5)(b)(ii)), allows credit against the tax imposed, for eligible expenses incurred in the State of Michigan by railroad companies for maintenance or improvement of rights of way, including those items, except depreciation, in the official maintenance-of-way and capital track accounts of the railroad company in this state during the calendar year immediately preceding the statutory due date of this report, but not to exceed the total liability for the tax under this act.

Additional Statutory Requirements for Eligibility (MCL 207.13(2) - (5))

In order to be eligible for the tax credit for maintenance and improvement of rights of way, the railroad companies must complete and file [3 COPIES OF] an annual report with the State Tax Commission that includes the following:

1.Detailed data of right of way work conducted in this state during the past calendar year separated by costs of labor and materials on each project and itemized in the following categories:

(a)Miles of track laid

(b)Tons of new ballast installed

(c)Number of ties installed

(d)Miles of track surfaced

(e)Signals installed

(f)Under drainage work done

2.The number of notices of violation from the railway inspectors by railroad section,

3.A detailed account of the location and nature of the work defined by railroad section or mile posts surrounding the work area plus the county, city, or township in which the work was performed,

4. Demonstration that the highest priority of expenditures for the maintenance and improvement of rights of way has been given to rail lines that handle hazardous materials, especially those that are located in urban or residential areas, and detailed data on the tonnages of hazardous materials handled in relation to tonnages of other traffic handled over the rail line for which a tax credit is being applied.

In addition, the company must grant to another railroad company, upon application by the latter, trackage rights over its line for trains, providing that the train operations do not interfere with the movement of Michigan freight using the same trackage, if operations can be accomplished safely in the opinion of the grantor and if trackage arrangements and train operations are approved by the interstate commerce commission.

***NOTE*** Filing of the credit application does not relieve you of the requirement of filing 3 copies of the above defined report with the State Tax Commission. You are still required to provide the above information in a separate report.

What expenses are eligible for credit against the tax levied? MCL 207.13(2)

Eligible Expenses:

1.Eligible expenses must have been incurred during the calendar year immediately preceding the statutory due date of this report.

2.Eligible expenses must have been incurred in the State of Michigan.

3.Examples of Eligible Capital Expenses for Road and Equipment include, but are not limited to items from the following categories:

(17) Roadway Buildings (portion housing MOW equipment and engineering)

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