The ARDA Newsletter      November 2023 
Property Taxes Off the Rails:  Illinois Property Tax Classification of Intermodal and Transloading Facilities as Railroad “Operating Property”
By: Matthew J. Hammer and Lisa Altukhova
Mohan Groble Scolaro, P.C.
Image item
Since PT Barnum pioneered “piggybacking” in the 1870’s and the Chicago Great Western Railroad popularized commercial intermodal by modifying truck trailers and loading them onto trains in the 1930’s, intermodal has grown to become so intertwined with modern railroading that some statutes and court decisions offer intermodal and transload facilities the same favorable treatment as railroads under certain circumstances.
Where can railroads and their intermodal partners look to benefit from these statutes and decisions?  Railroads and their partners operating in Illinois needn’t look too far.  The Illinois Property Tax Code may offer favorable property tax treatment to intermodal and transloading facilities that qualify as railroad “operating property” – even if those facilities are owned and operated by non-railroad entities.
Railroad “Operating Property” Defined
The taxation scheme set forth in the Illinois Property Tax Code (“Code”) classifies all railroad property as one of two categories: “operating property” or “non-carrier real estate.”  Non-carrier real estate is subject to local assessment and taxation, while operating property is exempt from local assessment and taxation and instead taxed directly by the Illinois Department of Revenue (“Department”) pursuant to the Code.  35 ILCS 200/11-80.
The Code broadly defines railroad “operating property,” as “all tracks and right of way, all structures and improvements on that right of way … and all other property … connected with or used in the operation of the railroad.”  35 ILCS 200/11-70(b) (emphasis added).  Under Department administrative decisions and case law, “operating property” generally “encompass[es] all real property owned or used by the railroad for railroad purposes, and includes structures and improvements used in the transaction of the railroad’s business.” Hynes v. Union Pacific, 95-RR-003 (Ill. Dept. of Rev. 1995) citing Chicago & A. R. Co. v. People, 98 Ill. 350, 358 (1881).  Railroad tracks are not required to be present on a property for classification as “operating property.”  Id.

We are excited to announce the 2024 ARDA Executive Forum registration is now open! The Executive Forum themed 'Growth' will kick off on January 29th and end on January 31st at the Hilton Ft. Worth hotel in Ft. Worth, TX. 
Click the link below to register today and take advantage of early-bird pricing! Members can find additional information about the event on our website.
We are excited to see you there!
ARDA Leadership

Image item

Image item
Is your company interested in becoming a sponsor of ARDA?
We have many fantastic sponsorship opportunities available for the upcoming year. To take advantage of these opportunities, click the link below to complete the pledge form today!
As a reminder, if your company plans to sponsor ARDA or an event for the 2023-2024 year, please be sure to complete the pledge form so your company receives all the benefits of being a sponsor!
Thank you all for your generous support of ARDA.
ARDA Leadership
If you have any questions, please contact us at

Renew Your ARDA Membership or Join Now

Membership renewal information was distributed in October. If you have not yet renewed your ARDA membership for 2023-2024, please visit our website at and log-in at the top right corner of the page. 

Your renewed membership allows ARDA to continue fostering the industrial, real estate, natural resources, market development activities and environmental concerns of the North American railroads through the advancement of ideas and education of its members.

If you are not an ARDA member and would like to join, please visit our registration page.
American Railway Development Association | 643 Landwehr Road, Northbrook, IL 60062
 American Railway Development Association (ARDA) is a not-for-profit educational trade association founded in 1906 to promote Economic Development, Real Estate Development, Technology, and Environmental Activities of the North American Railroads.   The objectives of the Association are to foster the industrial, real estate, natural resources, market development activities and environmental concerns of the North American railroads; and through the advancement of ideas and education of its members, further promote the effectiveness of railway development and related work. For more information, visit the ARDA website at