Want a tax break? Get out the bike
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By Clytie Bunyan
Published: October 12, 2008
We’ve been hearing about the plight of people on "Main Street” a lot lately, so I decide to wade through the financial rescue bill — the Emergency Economic Stabilization Act — to see what’s in it for working people away from the turmoil created by financial engineers.
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How it works
Any employee who uses a bicycle to get to and from work can be reimbursed for "reasonable expenses,” such as the purchase of the bicycle, improvements and repairs to it, and for storage.
Employees could get $20 for each month they use their bicycle to commute to work.
Woo hoo!
Seriously, why did they even bother with that? And why stop with a bicycle? How about roller skates or a rickshaw?
Bicycling to work is among those benefits that loaded down the bill, with other quirky provisions such as an exemption from excise tax for wooden arrows designed for use by children; increasing the limit on excise tax on rum; and extension of a wool research trust fund.
It’s not surprising taxpayers were outraged.
With no bike paths along major Oklahoma thoroughfares, I don’t know anyone who would jump at a chance to ride to work for $20 a month.
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Culture and Lifestyle, Public Finance, U.S. Congressional News, Business, Travel and Tourism, Taxes, Outdoor Recreation, National Economy, Bicycling, U.S. National Economy
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In December 2007 the voters in Oklahoma City approved a streets improvement bond issue that includes the development of over 200 miles of signed bicycle routes in Oklahoma City. The final plan was approved by the city council in the spring of 2008.
Pump up your tires!
http://www.bikeleague.org/news/100708faq.php
I am a bicycle commuter: how and where do I apply?
As [with] the parking, transit, and qualified parking programs, the bicycle commuter provision is a fringe benefit, so your employer will still have to set up a process to administer the benefit that works for your organization.
How does the program work?
The original intent was that an employer could now provide up to $20 a month in incentives related to an employee's bike commuting, to include, but not limited to, bike parking facilities, shower facilities, and maintenance then deduct that amount from their taxable income.
What costs are covered?
Most of the costs associated with commuting by bike are fixed and are barely affected by the daily distance covered. The intent of this provision is to help defray some to those fixed costs such as; the purchase of a decent commuter bicycle; bike lock; helmet; bike parking facilities; shower facilities; and general maintenance.
Why was the bicycle commuter act part of the financial rescue package?
The Bicycle Commuter Act has been in front of Congress for seven years; it’s a simple, equitable provision that puts cyclists on the same footing as people who get tax breaks for taking transit or driving (or parking, actually) their cars to and from work. The total anticipated cost of the provision, estimated by the Joint Committee on Taxation, is a very modest $1 million per year, as compared to the $4.4 billion annual cost of parking and transit benefits.
Why is the benefit only $20/month when transit users get $115 and car parkers $210 each month?
Proponents of the measure certainly wish it was higher, in fact, the initial request was for an $80 a month benefit which was approximately 25 percent below the transit benefit, which is set at $115. However, many Congressional Members had concerns about the program in general and specifically with the $80. Ultimately, the $20 per month figure was the result of compromise to enable the provision to move forward.