The Bicycle Commuter Tax Act… What it Means for You and Me
BRO submission by Christian Schmidt of Green Options Buffalo:
Now that it has passed, the question is how does the “Bicycle Commuter Tax Act” affect me as an employer or employee on a daily basis.
During a time where healthy, environmentally sustainable and community friendly transportation options are more and more looked at as an effective way to encourage energy efficiency, to improve public health, to prevent congestion, to eliminate greenhouse gas emissions and to improve community livability and safety, this is an essential step for encouraging bicycle use.
Beginning on January 1, 2009 employers will be able to use $20 a month or $240 a year to provide bicycle commuting to and from work as well as other related services to all its employees. The Bicycle Commuter Tax Act will enable businesses as well as industries in the private, public and non-profit sectors to help pay for things such as a commuter bicycle, a bike lock, a helmet, bicycle maintenance and shower facilities. The amount of money used to provide such amenities can then be deducted from the taxable income of the employer offering these benefits.
According to an article in the American Bicyclist Magazine (September/October 2008) both “employees and employers save all income and payroll taxes on the amount provided for qualified transportation fringe benefits for commuting.” As far as this most recent bicycle act is concerned the full amount of benefits can be used exclusively for commuting on two wheels (motorcycles excluded). The savings that can be expected are mainly due to tax savings. Employees in particular will be able to save in their annual commuting costs, while employers save on Federal and State income taxes, Social Security taxes paid for by both as well as unemployment, disability, workman compensation and retirement costs driven by salary.
Many may still be wondering why an employer would make these transportation benefits available to them. Simply put, Qualified Transportation Benefits such as this tax act will be an asset to employers sensitive to tax savings as well as employee moral, improved recruitment, reduced turnover and in the long run it will eventually keep the employer’s benefits package competitive. In addition to reduced FICA (Federal Insurance Contribution Act) and payroll related costs, the Bicycle Commuter Tax Act provides a special opportunity for all of us to play an active role in saving our environment. In addition, we can all capitalize on the numerous benefits of bicycle commuting including reduced stress from not driving, increased job satisfaction, improved on-time arrival and enhanced productivity. From the public health standpoint it provides an easy opportunity to be physically active on a daily basis, which will promote health and well-being as well as reducing health care costs.
If you are an employer this is an excellent opportunity for you to take advantage of. As an employee, you can share this information with your employer and encourage them to participate. Additional information can be found here: www.bikeleague.org.
Article Reference: Kiker, Elizabeth (September/October 2008). Bicycle Commuter Act Passes Congress! American Bicyclist, 12 - 15.
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Comment Options
sbrof
This is a great way to provide incentives for people to try other modes of transportation. This along with the NFTA Metro Advantage Program give people options in their transportation decisions. Although this is a good program I don't think I would ever use 20 dollars worth of anything per month by biking to work. It might be nice to save money and put it towards a new bike or supplies for those just starting out but in reality biking is so cheap that after you get your supplies it might not be worth staying in the program.
I have been saying it for years. The only thing we really need to do to increase bike usage for our city is to invest in its infrastructure. If this program will help employers pay for bike locks, showers, supplies or other amenities then it could go a long way to helping take cars off the road.
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BuffaloBloviator
I love riding my bike. Always have. I even still have the one I got in third grade and I still use it.
I love cars too. Not only are they great and fun gadgets but they have elevated our quality of life in many ways that we take for granted. Horses used to drop all over the roads. It was smelly and unhealthy. I don't think that it was a coincidence that mankind had record achievements in the last 100 years and one of the tools was the car.
We owe everything to fossil fuels. Soon fossil fuels will be obsolete because newer technology will make them to costly and impractical. We should never loose our appreciation for what coal, oil, and gas helped mankind achieve over the past 150 years in areas of medicine, transportation, communication, building materials, food, and most importantly - energy has fueled the upward wealth of all of our citizens.
Does this bill mean that I have to stop riding my bike because people will see me riding and think that I am anti-car, anti-energy, and that I believe in the original sin of man-made global warming?
This bill sounds logical as far as allowing the same job related transportation deductions as regular vehicles except that to the best of my knowledge commuting to and from work has never been tax deductible in the first place. The weird thing is that this bill was crammed into that 700 billion dollar bail-out as pork.
As an employer, I am all for bikes. I would like some clarification from Celino and Barnes about my exposure to lawsuits if an employee gets injured on a bicycle that I provide and encourage him or her to use.
I love nature and bikes and cars and energy, and I don't think that mankind is doing such a bad job of things. Is there a club I can join?
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blackrocklifer
Bloviator- You should join a History Club, because you obviously have not been paying attention. "Mankind" is doing a bad job and most all the damage has been done during the past 100 years you cite as "record achievements" of mankind.
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meanoldman
can i get a tax break for my coal powered roller skates? on an honest note! more bike friendly streets w/ lanes that cars stay out of, and the people of buffalo should recognize it as a true mode of transportation, not a weekend hobby.
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sbrof
well from what I understand it isn't a tax break.. but money you would normally spend, just before taxes. So you still have to spend the money, just like the NFTA Advantage Program. Then again I don't understand how people get the money to use. Or does the company collect the pool and redistribute it in the form of supplies or something. No idea. Seems like it is more confusing than it should be. Maybe it is just me.
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sonyactivision
One car door opens and all your "tax savings" are out the window. This plan has to be in conjunction with more usable bike lanes, better crossings, and bike racks. Plus the DOT needs to pull their heads out of their asses and realize that it's 2008, not 1953 and that a great many people would rather commute by bike than drive on another elevated highway.
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MikeInWNY
The government has screwed up the economy enough already, the last thing we need is another tax code.
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dagner
Under federal tax law, commuters can set aside pre-tax income to help pay commuting costs. Employers benefit in the same way described for the bike bill. Many employers are ignorant of this, and even fewer offer the benefit.
See summary table http://www.nctr.usf.edu/clearinghouse/commutebenefits.htm.
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