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A decision by the Surface Transportation Board affecting American Orient Express and carrier payments into the Railroad Retirement system has important implications for Amtrak and freight railroads.

The decision followed an earlier and similar ruling by the Railroad Retirement Board. American Orient Express, or AOE, claimed it is not a common carrier subject and, as such, has no obligation to pay Railroad Retirement or Railroad Unemployment taxes - that it is a land excursion company that owns vintage railroad coaches, diners and sleepers, and merely provides vacation packages.

AOE asserted that Amtrak, which pulls its excursion cars with Amtrak locomotives and operating crews, is the common carrier subject to the Railroad Retirement and Railroad Unemployment taxes. But, said the STB in its ruling. AOE is indeed a rail carrier. As such, AOE must pay Railroad Retirement and Railroad Unemployment taxes on its employees.

The STB ruled that AOE, by making reservations, selling tickets and holding itself out to the public, is, in fact, engaged in the business of transporting persons or property.

[United Transportation Union, 1-24-06]