New York Advisory Opinion TSB-A-96(5.1)I: Now that the federal Amtrak Reauthorization and Improvement Act (ARIA) exempts rail employees who work in more than one state from multi-state income taxation, which Metro-North job categories actually qualify for that exemption?

Plain-English summary

TSB-A-96(5.1)I is labeled a "Modified Advisory Opinion" and is dated October 21, 1999, even though it carries a "96(5.1)" number tying it back to a 1996 petition sequence - the Department simply didn't issue this particular modification until three years later. It formally revises four earlier opinions the Department had issued to the same petitioner, Metro-North Commuter Railroad Company: one from March 1991, one from April 1993, one from October 1993, and one from December 1996 (that last one is TSB-A-96(5)I, a separate, related opinion in this same corpus). This opinion narrows the Department's interpretation of those earlier rulings - it does not reopen or change the tax results the Department reached for the years those earlier opinions covered. The new, narrower reading applies only prospectively, to taxable years beginning on or after January 1, 2000.

The underlying legal question, in all five opinions, is the same: how does the federal Amtrak Reauthorization and Improvement Act of 1990 ("ARIA," Pub. L. 101-322) limit which states can tax the wages of a railroad employee who works in more than one state? ARIA amended 49 U.S.C. § 11504(a) (recodified in 1996, after the Interstate Commerce Commission was abolished, as § 11502(a)) to say that compensation paid to "an employee who performs regularly assigned duties as such an employee on a railroad in more than one State" cannot be taxed by any state except the employee's state of residence.

Before ARIA, the predecessor statute only protected the employer from having to withhold tax for more than one state - it did not stop a state from taxing the employee directly. It also used two separate clauses: clause (A) covered employees who "perform[] regularly assigned duties on a locomotive, car or other track-borne vehicle" (engineers and conductors who physically ride the train), and clause (B) covered employees "engaged principally in maintaining roadways, signals, communications, and structures" (roadbed and track-maintenance crews). ARIA did two things: it turned the exemption into a real employee-level tax exemption, and it collapsed the old (A)/(B) structure into one clause covering an employee "regularly assigned ... on a railroad in more than one State."

The question this opinion resolves is what that single ARIA clause now covers. The Department's newly adopted position is that the ARIA clause should be read as "telescoping" the old (A) and (B) clauses together - so the exemption still reaches only train-and-engine positions and Maintenance-of-Way positions, and does not expand to cover the broader "universe of employees" of a railroad company. The Department gives three reasons: (1) if Congress meant to exempt every railroad employee, it would not have needed the narrowing phrase "on a railroad"; (2) nothing in ARIA's legislative history or its statutory predecessor supports reading it that broadly; and (3) unlike engineers, conductors, and track-maintenance workers - who face regular, built-in multi-state tax exposure because of the nature of their jobs - other railroad job categories are not meaningfully different from any other multi-state commercial employment, so there is no special reason to shield them.

Applied to Metro-North: "train and engine" positions (engineers and conductors) and "Maintenance of Way" positions (track maintenance) are exempt only when assigned to the New Haven line - the only Metro-North line that crosses a state line (New York/Connecticut). The Harlem and Hudson lines stay entirely within New York, so positions on those lines are not exempt even if an employee occasionally takes a one-day New Haven-line "familiarization" trip. The exemption attaches to the position, not the person for the whole year: an employee who spends 11 months on a Hudson-line engineer posting and then 6 months on a New Haven-line posting is exempt only for the New Haven-line pay. And all other Metro-North positions - anyone who isn't literally in a train/engine or Maintenance-of-Way role - get no ARIA exemption at all, regardless of how many states their work touches.

What this means for you

Rail-industry employers and payroll departments

If you run payroll for an interstate rail carrier, this opinion is a reminder that ARIA's multi-state tax exemption is not an "all railroad employees" pass. Before treating any position as exempt from New York withholding under ARIA, confirm (1) the position is genuinely a "train and engine" role (physically working on the locomotive/car) or a "Maintenance of Way" role (track/roadbed maintenance), and (2) that specific position is regularly assigned to a route that actually crosses a state line - for Metro-North, that means the New Haven line only. A position on an entirely intrastate line, or a position outside those two job categories, does not qualify no matter how the employee's overall duties are described. Also track position changes during the year: the exemption follows the position an employee currently holds, so a mid-year transfer from an intrastate assignment to a state-line assignment (or vice versa) should split the year's withholding treatment accordingly.

Individual rail employees who work in more than one state

If you are an engineer, conductor, or track-maintenance worker whose job regularly takes you across a state line, you may be exempt from tax by any state other than your state of residence - but only for the pay tied to the specific position that crosses the line. An occasional or "familiarization" trip across the state line does not convert an otherwise intrastate assignment into an exempt one (though the single day's pay for that trip could itself be treated as exempt). If your job is not a train/engine or track-maintenance role - for example, an administrative, clerical, or other support position - ARIA's exemption does not apply to you at all, even if your duties happen to take you into more than one state.

Common questions

Q: Why does this opinion modify TSB-A-96(5)I and the other earlier Metro-North opinions instead of just standing on its own?
A: The Department had already given Metro-North advisory opinions in 1991, 1993 (twice), and 1996 addressing how ARIA's "regularly assigned duties" language applies to its workforce. After further review, the Department decided its interpretation needed to be narrower - specifically, that the ARIA exemption only ever reached train-and-engine and Maintenance-of-Way positions - so it issued this document as a formal modification of those four prior opinions rather than a freestanding new opinion.

Q: Does this modification change the tax outcome for years covered by the earlier opinions?
A: No. The opinion is explicit that the modified interpretation applies "for taxable years beginning on or after January 1, 2000." It does not reach back and change how ARIA applied to Metro-North (or its employees) for tax years before 2000; those earlier opinions' conclusions stand for the periods they addressed.

Q: Does the ARIA exemption cover every Metro-North employee who happens to work in more than one state?
A: No. The Department's position is that ARIA's phrase "regularly assigned duties ... on a railroad" telescopes the pre-ARIA statute's two clauses - train/engine work and Maintenance-of-Way work - and does not extend to the broader universe of a railroad's employees. An employee outside those two job categories gets no ARIA exemption regardless of how many states are involved in the job.

Q: My engineer position is on the Harlem or Hudson line, but I occasionally take a training trip on the New Haven line. Am I exempt?
A: No, not for your regular assignment. The opinion specifically addresses this "familiarization trip" scenario and concludes that an occasional trip on the interstate line does not convert an otherwise intrastate assignment into a "regularly assigned" multi-state position; only positions actually assigned to the New Haven line qualify.

Q: If I switch positions partway through the year, how is the exemption applied?
A: Position-by-position, not employee-by-employee for the whole year. The opinion gives the example of an employee who holds an 11-month Hudson-line engineer posting and then a 6-month New Haven-line posting - only the pay from the New Haven-line posting is exempt under ARIA.

Q: Can a later Department opinion modify an earlier advisory opinion like this one does?
A: Yes. This document itself demonstrates that the Department can revisit and formally modify its own prior advisory opinions when it changes its interpretation of the governing law, while making clear whether (and from when) the new interpretation applies going forward.

Citations and references

• 49 U.S.C. § 11502(a) (formerly § 11504(a)) - bars any state other than an employee's state of residence from taxing compensation paid to a rail employee who performs regularly assigned duties on a railroad in more than one state
• Pub. L. 101-322, Amtrak Reauthorization and Improvement Act of 1990 ("ARIA"), § 7 - amended former 49 U.S.C. § 11504(a), turning a limited employer-withholding exemption into an employee-level, multi-state income tax exemption, and collapsing the prior two-clause structure into a single clause
• Federal Public Law 104-88, ICC Termination Act of 1995 - abolished the Interstate Commerce Commission effective January 1, 1996, and the former § 11504(a) exemption was recodified as § 11502(a)
• TSB-A-91(3)I (issued March 18, 1991), TSB-A-93(3)I (issued April 28, 1993), TSB-A-93(11)I (issued October 19, 1993), and TSB-A-96(5)I (issued December 17, 1996) - the four prior Metro-North advisory opinions that this opinion modifies, effective for taxable years beginning on or after January 1, 2000

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1996.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a96_5_1i.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-96(5.1)I
Income Tax
October 21, 1999

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
MODIFIED ADVISORY OPINIONS

PETITION NO. I910118A
PETITION NO. I930210A
PETITION NO. I930722A
PETITION NO. I960620A

Advisory Opinions were issued to Metro-North Commuter Railroad Company, 347 Madison
Avenue, 19th Floor, New York, New York 10017, on March 18, 1991 with respect to Petition No.
I9101118A, TSB-A-91(3)I; April 28, 1993 with respect to Petition No. I930210A, TSB-A-93(3)I;
October 19, 1993 with respect to Petition No. I930722A, TSB-A-93(11)I; and December 17, 1996
with respect to Petition No. I960620A, TSB-A-96(5)I.
The issue raised by Petitioner, Metro-North Commuter Railroad Company, is how the
application of the Amtrak Reauthorization and Improvement Act of 1990, PL 101-322 ("ARIA"),
affects employees traveling to more than one state during the course of their employment.
Specifically, the meaning of the term "regularly assigned" and the types of occupations and work
schedules covered by ARIA are at issue.
After a current review of the application of the ARIA, such Advisory Opinions are modified
to the extent discussed herein, for taxable years beginning on or after January 1, 2000.
Discussion
ARIA amended various provisions of Title 49 of the United States Code relating to state and
local taxation of compensation paid to employees of interstate rail carriers, interstate motor carriers
and interstate motor private carriers and applies to compensation paid on or after July 6, 1990.
Section seven of ARIA amended section 11504(a) of Title 49 of the United States Code (49
USC § 11504(a)) with regard to a rail carrier providing transportation subject to the jurisdiction of
the Interstate Commerce Commission under Subchapter I of Chapter 105 of Title 49. The Interstate
Commerce Commission was abolished by Federal Public Law 104-88, the ICC Termination Act of
1995, effective January 1, 1996. The provisions of former 49 USC § 11504(a) are now contained
in section 11502(a) of Title 49 of the United States Code (49 USC § 11502(a)). 49 USC § 11502(a)
states, in pertinent part, that:
No part of the compensation paid by a rail carrier ... to an employee who
performs regularly assigned duties as such an employee on a railroad in more than
one State shall be subject to the income tax laws of any State or subdivision of that
State, other than the State or subdivision thereof of the employee's residence....
(emphasis added)

-2­
TSB-A-96(5.1)I
Income Tax
October 21, 1999

Prior to ARIA, 49 USC § 11504(a) provided a much more limited exemption for railroad
employers, from the duty to withhold income tax on the compensation of certain of their employees.
This provision was limited to employer relief from the multi-state burden; it did not exempt the
employees from the burden of multi-state income taxation.
While it is plain that ARIA greatly expanded the reach of the exemption, from employer
withholding to employee taxation, it is not so clear whether or how the employee population covered
by the exemption was intended to change. The pre-ARIA exemption applied to an employee who­
(A) performs regularly assigned duties on a locomotive, car or other track-borne
vehicle in at least 2 States ...; or
(B) is engaged principally in maintaining roadways, signals, communications, and
structures or in operating motortrucks from railroad terminals in at least 2 States....
This exemption language was cast in 2 separate clauses. The (A) clause applied to
employees who work on a locomotive or car, e.g. the engineers and conductors who ride the train.
The term regularly assigned in this clause has the meaning which relates to their kind of work,
where the normal tour of duty on the train will cross state lines. On the other hand, the (B) clause
applies to roadway maintenance workers. These workers are assigned to a specific roadway which
crosses state lines, but they will work in any given state on the roadway on an as-needed basis.
The ARIA exemption is a single clause cast in terms of "an employee who performs
regularly assigned duties as such an employee on a railroad in more than one State ...." It is the
Department's position that this exemption telescopes the former (A) and (B) clauses into one. The
ARIA exemption clause refers only to employees regularly assigned. In the ARIA clause, these
employees must be regularly assigned on a railroad, which is interpreted to be shorthand for the preARIA phrases of on a locomotive, car, or other track-borne vehicle, and in maintaining roadways,
signals, communications, and structures of the railroad.
It is the Department's position that the correct reading of the ARIA exemption applies only
to the pre-ARIA clause (A) employees, e.g., engineers and conductors, and the former (B) clause
roadbed employees. However, the exemption does not apply to all the other kinds of employees of
the railroad, for the following reasons:
•

As a matter of statutory construction, the relevant phrase in the ARIA
exemption refers to an employee who performs regularly assigned duties on
a railroad. The Department interprets this construction to mean on the train,
and, on the roadbed, but not to cover the universe of employees of the
railroad company. If Congress had intended an expansive meaning, the
phrase on a railroad would not have been necessary.

-3­
TSB-A-96(5.1)I
Income Tax
October 21, 1999
•

There is nothing in either the legislative history nor in the statutory precursor
to the ARIA exemption to suggest such an expansive reading to include the
universe of employees.

•

Unlike conductors and engineers and the track maintenance employees, for
whom crossing state lines would pose regular exposure to State taxation,
there is nothing unique about other kinds of employment for a railroad that
distinguishes it from employment in any other commercial endeavor.
Accordingly, there is nothing that would invite the protection of a federal
prohibition against state taxation.

Conclusion
With respect to Metro-North, the ARIA exemption phrase an employee who performs
regularly assigned duties as an employee on a railroad in more than one State, is applied as follows:
•

Metro-North positions working on a locomotive, car or other track-borne vehicle,
e.g., engineers and conductors, which we understand are categorized as "train and
engine" positions, are positions that are regularly assigned duties on a railroad. Of
these positions, only those positions on the New Haven line (the only line that
traverses a state line) are positions that are regularly assigned in more than one state.
Accordingly, only train and engine positions on the New Haven line are included in
the ARIA exemption. Engineers and conductors assigned to other lines who travel
the New Haven line only occasionally, such as for the "familiarization" trip described
in the Advisory Opinions, are not included in the ARIA exemption.

•

The ARIA exemption applies to the position of an employee. For example, if an
employee holds an engineer job posting for 11 months on the Hudson line and then
switches to an engineer posting for 6 months on the New Haven line, only the New
Haven posting is exempt.

•

Metro-North track positions described as "other than train and engine" and
categorized as "Maintenance of Way", which comprise track maintenance employees,
are also positions that are regularly assigned duties on a railroad. Of these positions,
only those positions on the New Haven line are positions that are regularly assigned
in more than one state. Accordingly, only "Maintenance of Way" positions on the
New Haven line are included in the ARIA exemption. "Maintenance of Way"
positions on the other Metro-North lines are not included in the ARIA exemption.

-4­
TSB-A-96(5.1)I
Income Tax
October 21, 1999
•

As to all other Metro-North positions, there is no ARIA exemption. These include
all other positions described as "other than train and engine".

DATED: October 21, 1999

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.