Railroad Purchases

Railroad businesses involved in interstate or intrastate commerce can buy certain rolling-stock items exempt from sales or use tax.

Nontaxable Purchases

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.

Taxable Purchases

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
• tools
• trucks and hand carts used to repair the track