Here's some good news for biking...cyclists will get more equal treatment from the IRS.
While the emergency relief/bail-out bill may not be popular, there is a provision included that is favorable to cyclists. The legislation will include a proposal by Senator Wyden and Congressman Blumenauer, both of Oregon, to provide some modest tax relief for those who use their bike to commute to work. While motorists may get employer provided fringe benefit for car parking or mileage reimbursement, there is no analogous benefit for cyclists recognized by the IRS. The legislation will allow employer-provided transportation fringe benefit to be considered tax-free income for bicycle commuters. The provision will encourage more cycling for transportation, treat cyclists fairly, address transportation priorities by reducing fuel demand, traffic pollution and congestion, while promoting good health.
Studies show that as cities and employers increase their support for cyclists, cycling increases, with all the energy, health, traffic congestion reductions and environmental benefits that go with it.
Also, as the number of cyclists increase, motorists become more alert to the presence of cyclists in the road and safety increases (as cycling in London increased 100%, 2000-2005, the cyclist accident rate fell 40%; Transport for London, quoted in the Wall Street Journal, 5/19/06).
This law is fundamentally sound tax policy because it puts employer subsidies for bicycle commuting on essentially the same tax footing as existing subsidies for employees who drive or use public transit. Further, employer-provided incentives for cycling may also reduce employer health insurance costs, by offering support for healthy activities.
