Commuters can kiss perks goodbye

Tax bill eliminates incentive for private employers to subsidize employees’ transit, parking costs.

WASHINGTON — Count commuters among the losers in the Republican tax bill that the House and Senate are expected to vote on this week.

The final bill agreed to by Republican negotiators eliminates the tax incentive for private employers that subsidize their employees’ transit, parking and bicycle commuting expenses.

Currently, companies can provide parking or transit passes worth up to $255 a month to employees as a benefit to help pay for their commuting expenses, and then deduct the costs from their corporate taxes. That amount was set to increase to $260 a month on Jan. 1.

The reasoning behind the elimination of the deduction is that since the tax bill substantially lowers the corporate tax rate, smaller tax breaks that complicate the tax code are no longer necessary.

Companies could still provide the parking and transit passes to employees, but they would no longer get the tax deduction. And employees who pay for their own transportation costs can still use pre-tax income.

The elimination of the subsidy has transit agencies worried that fewer commuters will opt for transit.

“It’s clearly a negative for commuters who are spending a lot of money on public transportation,” said Rob Healy, vice president for governmental affairs at the American Public Transportation Association. The employer subsidies are generally more lucrative for commuters than the ability to use pre-tax income for transportation costs, he said.

“The concern is that if employers can’t write it off, they won’t offer it. And if they don’t offer it, it’s a loss to the employees,” Healy said. “It could ultimately hurt the ridership.”

Businesses that provide their employees with $20 per month to cover the expense of commuting by bicycle would also no longer be able to write off the benefit under the tax bill.

Without that incentive, the relatively few employers offering the benefit may discontinue it, said Ken McLeod, policy director for the League of American Bicyclists.

Getting rid of the bicycle benefit, which was adopted in 2009, would save the government a relatively low $5 million a year, McLeod said.

By comparison, the parking benefit costs the government about $7.3 billion a year in foregone taxes, according to a report by TransitCenter, a transit advocacy group.

What bothers bicyclists the most, McLeod said, isn’t so much the money, but “just that it feels like the federal government doesn’t support biking.

“I don’t know if that is something the legislators meant to express,” he said, “but that’s something we’re definitely hearing.”