A group of congressmen have introduced legislation to encourage the replacement and modernization of the U.S. freight railcar fleet.
The Freight RAILCAR Act of 2025 would provide a nonrefundable 10 percent tax credit for replacing or modifying existing railcars over three years. The credit is limited to 1,000 new freight cars per taxpayer, and existing railcars must have been in service during the 48 months before enactment.
U.S. Reps. Darin LaHood, R-Illinois; Brad Schneider, D-Illinois; and 39 cosponsors introduced the measure.
“Not only will this legislation improve the efficiency of railcars, but it will address supply chain constraints and support American manufacturing jobs,” LaHood said in a statement.
Proponents argue that the tax credit will encourage renewed investment in higher-capacity, fuel-efficient freight railcar manufacturing in the United States.
The current North American railcar fleet has more than 1.6 million railcars with roughly 321,000 in storage. According to the most recent data, in 2023, the railway supply industry contributed $75 billion to the U.S. GDP and directly provided 240,000 U.S. jobs.
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