Railroad businesses involved in interstate or intrastate commerce can buy certain rolling-stock items exempt from sales or use tax.
The following railroad purchases are nontaxable (the rolling-stock exemption applies to them).
- rolling stocks (railcars and engine compartments that travel on a track)
- accessories or equipment attached to rolling stocks
- diesel fuel
- oil and lubricants
- repair and replacement parts for rolling stocks
To claim this exemption, give your vendor a completed Form ST3, Certificate of Exemption. Specify the rolling-stock exemption.
The following railroad purchases are taxable (the rolling-stock exemption does not apply to them).
- equipment and accessories not attached to rolling stocks
- materials used to build the track
- trucks and hand carts used to repair the track