Take a bike : New provision allows employers to reimburse bike-riding commuters
Posted on Tuesday, January 6, 2009
Daily Record photograph by Sarah Nader Benton County Judge Dave Bisbee held his first Quorum Court meeting Monday night at the Benton County Administration Building in Bentonville. Bisbee and justices of the peace set meeting times for the calendar year.
BENTON COUNTY - For years, companies across the country have been offering gas reimbursement for business-related travel. Many even offer incentives to carpool or use public transit. That's nothing new.
As of Jan. 1, employees who regularly use their bicycles to get to and from work are eligible for up to a $20-a-month, tax-free reimbursement from their employers for bicyclerelated expenses. Employers will in turn be able to deduct the expense from federal taxes.
According to a release from the National Center for Bicycling and Walking, the Bicycle Commuter Act is an extension of a transportation fringebenefit law that gives tax breaks to employers for setting up carpools and other plans for reducing traffic congestion. The total anticipated cost of the provision, estimated by the Joint Committee on Taxation, is $1 million per year, compared to the $4.4 billion annual cost of the existing car parking and transit benefit programs.
The bicycle commuter benefit legislation was originally introduced seven years ago by U.S. Rep. Earl Blumenauer, D-Ore., but is just now seeing the light of day. "The original ask was for an $80-a-month benefit," said Peter Harkness, board chairman of the NCBW. "But during the compilation of the House and Senate bills, the compromise amount was set at a maximum $20 a month. It's not a perfect program, but it's a good start."
Now it's a matter of growing awareness that this kind of reimbursement for commuting to and from work by bicycle is actually available.
"We're hearing that many employers don't know anything about the bicycle-commuter provision, or that it went into effect on Jan. 1," Harkness said. "This provision is a matter of equity. It gives bike commuters benefits similar to those already enjoyed by people who drive or take public transit to work."
The Bicycle Commuter Act was part of a larger set of Renewable Energy Tax Credit Initiatives included in the Emergency Economic Stabilization Act of 2008, signed into law by President George W. Bush in late 2008. The Act allows for a "qualified bicycle commuting reimbursement for reasonable expenses incurred by the employee ... for the purchase of a bicycle and bicycle improvements, repair and storage, if such bicycle is regularly used for travel between the employee's residence and place of employment."
The Daily Record contacted Wal-Mart Stores Inc. and Tyson Foods, two of the largest employers in northwest Arkansas, to find out if they plan to implement the reimbursement program or if any employees have approached leadership about the program. Neither company had responded at presstime Monday.
While Wal-Mart did not comment in time for this story, the nation's largest retailer did recently take a significant step toward supporting associates who choose to commute to and from work by bicycle. In 2008, Wal-Mart expanded or added bike racks at its Home Office in Bentonville and several of its other corporate buildings across the area. The company even went as far as to construct showers and locker rooms at its Home Office for use by associates who ride their bikes to work.
Employers need only decide whether to offer the program as a subsidy, in which the employer pays the cost, or as part of a payroll program in which employees take pre-tax deductions from their salaries, according to the release from the NCBW.
Sharon Roerty, executive director of the NCBW, said, "It's key to understand that the measure only provides an opportunity for an employer to extend the bicycle commuting benefit. It's still up to employers to implement the subsidy, and up to bicyclecommuting employees to request it.
"All types of employers - from single-person offices to large businesses with multiple locations and from every industry category in the private, public and nonprofit sectors - have the option to offer this qualified transportation fringe benefit to their employees," she said.
While the NCBW believes it will take time for companies and the American work force to become aware of and familiar with this new provision, there's evidence to suggest it has been gaining steam the past couple of days.
According to a spokesman for California-based Accor Services, which recently introduced the Commuter Check for Bicycling voucher system for businesses that don't want to build their own reimbursement system, calls have already been taken from companies across the country.
Accor Services posted the following on its Web site: "Commuter Check is ready with a product that makes the bicycle benefit a breeze to administer. If you offer it as a pre-tax payroll deduction, you will save on all payroll taxes on whatever your employees set aside. If you offer it as a subsidy, the money you give will be tax-free.
However companies decide to handle this new provision, Roerty believes it's a big step in the right direction.
"There are a lot of inexpensive ways to encourage more bicycle commuting, and this benefit could encourage efforts in that direction," Roerty said. "More people might give bicycle commuting a try if they know their business supports it, even at this basic level."
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