Bailout Gives Tax Break to Bicycle Commuters

Bailout gives tax break to bicycle commuters
Rachel Gordon, Chronicle Staff Writer
Thursday, October 9, 2008

(10-08) 19:16 PDT -- The $700 billion bailout bill intended to stop
the tailspin of the nation's financial sector did something else: It
includes federal tax benefits for people who commute by bike.

Starting in January, workers who use two-wheelers as their primary
transportation mode to get to and from work will be eligible for a
$20-a-month, tax-free reimbursement from their employers for
bicycle-related expenses. In return, employers will be able to deduct
the expense from their federal taxes.

"It significantly legitimizes bicycling and elevates it to a credible
commute mode, like riding a bus or train," said Andy Thornley, program
director for the San Francisco Bicycle Coalition.

The money could be used to purchase, store, maintain or repair bikes
that are used for a substantial portion of an employee's commute.

Bike advocates have been trying for seven years to get such a
provision passed in Washington, but came up short until Congress
rushed through the Wall Street bailout package last week and lawmakers
squeezed in pet projects. The bicycle benefit was championed by
members of the Oregon delegation.

Backers estimate that the federal tax rolls may lose out on about $1
million a year due to the new employer write-off, according to the
advocacy group League of American Bicyclists.

Willy Dommen, 49, regularly rides his bike from his San Anselmo home
to his job as a management technology consultant in San Francisco's
Financial District. He said the $20-a-month perk for cyclists won't
amount to much in term of covering actual expenses. But, he said, it
will help raise awareness of bicycling, "and that recognition is
great."

San Francisco Supervisor Ross Mirkarimi plans to introduce an
amendment to a law he sponsored earlier this year that requires all
but the smallest businesses in the city to provide their employees
with incentives to get them out of their cars and onto transit.

Under the city law, which will take affect next summer after a
six-month public education period, employers with 20 or more employees
will have to offer their workers transit passes or vanpool
reimbursements or offer them door-to-door shuttle service, or set up a
program in which employees could tap into an existing federal program
that provides tax breaks for those who commute on transit. Mirkarimi
hopes to add the new fringe benefit for bicyclists as an acceptable
alternative.

"It's another opportunity to encourage good commuting habits," he said.

The federal bike bill would not allow participants to tap into both
the transit credit and the bike reimbursement.

E-mail Rachel Gordon at rgor...@sfchronicle.com.

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