Michigan Form 1028 – Fill Out and Use This PDF

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.

Company Name			Federal Tax ID Number
Company Address to which the tax bill should be sent		City	State	ZIP Code
Company Authorized Contact Person (to whom correspondence concerning this report should be addressed)			Company Web site
Contact Address		City	State	ZIP Code
Contact Telephone Number	Contact Fax Number		Contact E-mail Address

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 _____________________________________, _______________.

Signature of Notary Public

My Commission Expires

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)

								TRUE
								CASH
	No. of	COSTS				REPORTABLE		VALUE
YEAR OF	Units	REPORTED	LOSSES	ADDITIONS		COSTS		(office
ACQUISITION	Reported	PRIOR	(office use	(office use	NO. OF	CURRENT		use
	Prior Year	YEAR	only)	only)	UNITS	YEAR	MULTIPLIER	only)
		(office use)
2011							0.8900
2010							0.7600
2009							0.6700
2008							0.6000
2007							0.5400
2006							0.4900
2005							0.4500
2004							0.4200
2003							0.3800
2002							0.3600
2001							0.3300
2000							0.3100
1999							0.2900
1998							0.2800
Prior							0.2300
TOTALS

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)

Column A	Column B	Column C	Column D	Column E	Column F	Column G	Column H
Previous	Original Cost	Accumulated	Expenditures for	Depreciation	Plant Balance	Accumulated	Net Book Value
Year	of	Depreciation of	Additions During	of New Additions	at Year End	Depreciation	= F - G
Plant Balance	Retirements	Retirements at	the Calendar	During the	= A - B + D	at Year End
from last	Made During	Beginning of	Year	Calendar Year
Year’s	Calendar	Calendar Year
Column F	Year

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: _________

Explanation:	_______	_	_
			plus

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)

Last Four Year Results as Previously Reported

Balance at Close of

Calendar Year

Five Year Average

(office use only)

(December 31st)

(office use only)

year - 4

year - 3

year - 2

year - 1

-0-

-0-

-0-

-0-

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.

	Ar e y ou r op e r a t ion s e n t ir e ly w it h in t h e St a t e of M ich ig a n ?
	Yes		_ _ _		No	_ _ _
	I f Yes, y ou do not need t o pr ov ide t he follow ing in for m at ion .
	I f No, please pr ov ide t he follow in g in for m at ion below ( Car Miles an d Rev en u es) .
	Car Miles								National	Michigan
	1.	Freight Car Miles (Loaded and Empty)
	2.	All Other Car Miles
	3.	Total Car Miles (1+2)
	4.	Percentage Attributable to Michigan
	Revenues (please enter full dollar amounts)								National	Michigan
	1.	Freight Revenue
	2.	All Other Revenue from Operation
	3.	Total Operating Revenue (1+2)
	4.	Percentage Attributable to 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?

Yes

____

No

____

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:

Mailing Address:	For Overnight Package Delivery:
Michigan Department of Treasury	Michigan Department of Treasury
Michigan State Tax Commission	Michigan State Tax Commission
P O Box 30471	Austin Building
Lansing, MI 48909-7971	430 W. Allegan Street
	Lansing, MI 48922

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:

Mailing Address:	For Overnight Package Delivery:
Michigan Department of Treasury	Michigan Department of Treasury
Michigan State Tax Commission	Michigan State Tax Commission
P O Box 30471	Austin Building
Lansing, MI 48909-7971	430 W. Allegan Street
	Lansing, MI 48922

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.

9

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:

(1)	Engineering exp. directly related to R & E Property	(23)	Wharves and Docks
(3)	Other Right-of-Way Expenses	(24)	Coal and Ore Wharves
(4)	Grading	(25)	TOFC/COFC Terminals
(5)	Tunnels and Subways	(26)	Communication Systems
(6)	Bridges, trestles, and culverts	(27)	Signals and Interlockers
(7)	Elevated Structures	(37)	Roadway Machines
(8, 9, 10, 11) Ties, Rails and other Track Material		(38)	Roadway small tools
(12) Track Laying and Surfacing		(39)	Public Improvements - Construction
(13) Fences, Snowsheds, and Signs		(43)	Other Expenses - Road

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

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4.Examples of Eligible MOW Expenses include, but are not limited to items from the following categories (reference to lines in Schedule 410):

1-5	Superintendence		109 Roadway Machines
6-7	Roadway Maintenance (req. for sight lines)		110 Small Tools and Supplies
8-9	Tunnels and Subways		111 Removing Snow, Ice, and Sand
10-11 Elev. struct., Bridges, Trestles & Culverts			25-26 Public Improvements - Maintenance
12-15		Ties, Rail, and other Track Material	115-117	Injuries to persons, insurance
16-17		Ballast	1-117 Stationery and Printing
12-17		Track Laying and Surfacing	112-114	Empl Health And Welfare Benefits
102	Fences, Snowsheds, and Signs		148-150	Right-of-way Expenses
102	Roadway Buildings(MOW portion only)		124-126 and 139-141 Maint. of joint tracks,
103-104 Coal and Ore Wharves			yards, and other facilities - Dr.
106	TOFC/COFC Terminals		124-126 and 139-141 Maint. of joint tracks,
23 Communication Systems			yards, and other facilities - Cr.
21-22		Signals and Interlockers

5.Eligible Expenses for repairs to foreign cars damaged by derailment are determined on a case-by-case basis, net of offsets.

Non-Eligible Expenses:

1.Expenses that were not incurred during the calendar year immediately preceding the statutory due date of this report are NOT ELIGIBLE.

2.Expenses made outside of Michigan are not eligible.

3.Expenses from the following capital expenditure categories are not eligible:

(2)	Land for transp. purposes	(29)	Power Plants
(16)	Station and Office Buildings	(31)	Power Transmission Systems
(18)	Water Stations	(35)	Miscellaneous Structures
(19)	Fuel Stations	(44)	Shop Machinery
(20)	Shops and Engine Houses	(45)	Power Plant Machinery
(21)	Grain Elevators	(52)	Locomotives
(22)	Storage Warehouses	(53-58) Railroad Cars

4. If you receive grants from the Michigan Department of Transportation for improvement of Public Crossings (21-22 signals, 25-26 Public Improvements-maintenance, Schedule 410 line 39 public improvements), they are given "in and out" treatment and are not eligible expenses for the purpose of the credit calculation. (Receipts are not revenue and payments are not expenses.)

5.Expenses for cleanups of spills of cargo are NOT ELIGIBLE.

6.Expenses for removal of wrecked cars are NOT ELIGIBLE.

Maximum Credit Available (MCL 207.13(2))

The maintenance of way expense credits under MCL 207.13(2) and MCL 207.13a(5)(b)(ii) 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.

11

Instructions for Tax Credit for Maintenance and Improvement of

Qualified Rolling Stock in Michigan

Who is eligible for the credit? (MCL 207.13a)

An 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.

What expenses are eligible for credit?

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 railcars which are subject to taxation by the State under PA 282 of 1905 as amended.

Note: Repairs to leased railcars on which the lessor pays the taxes are not eligible for credit claims by the lessee and vice versa.

Examples:

Eligible expenses include, but are not limited to: repainting, interior or exterior washing, and repair or replacement of car parts and components.

Expenses which are NOT eligible include, but are not limited to: expenses for repairs or maintenance performed outside Michigan; expenses for repairs or maintenance on railcars for which the company has no tax liability; expenses for repair, maintenance or improvement to any railroad right-of-way and track; and expenses for repairs or maintenance not incurred in the calendar year immediately preceding the statutory due date of this report.

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.

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