Commuting - tax credits for bike commuting

Some Congressmen (Sen. Roy Wyden and Rep. Earl Blumenauer, both of Oregon) introduced legislation over the past few years that would extend certain tax credits or deductions for people who bike commute. Does anybody know if that legislation ever passed? I think not, given our current power structure in Washington. However, I'm in the process of doing my taxes for 2007, so I thought I would check to make sure.

It was voted down. When you see people in this forum start showing off their new Seven and Moots commuters, you'll know the bill passed.

That sucks although it isn't suprising. I bought a hybrid this year and felt the tax credit was going to be a sure thing until I started researching it. I found out that the tax credits for hybrids are only offered until a certain number of each is sold then the credit steadily decreases until it goes away entirely. Luckily I still qualified and used my refund to buy a bike. Apparently the government only cares about rewarding a few people for getting hybrids and then its just to costly. Communist!



N.

http://badhuman.wordpress.com

Some Congressmen (Sen. Roy Wyden and Rep. Earl Blumenauer, both of Oregon) introduced legislation over the past few years that would extend certain tax credits or deductions for people who bike commute. Does anybody know if that legislation ever passed? I think not, given our current power structure in Washington. However, I'm in the process of doing my taxes for 2007, so I thought I would check to make sure.


It wasn't going to work that way anyway... it would have provided the break to your employer.

Isn't this a wonderful country? Tax breaks for buying a Hummer but not bike commuting! Maybe someday.

i wish i could sit in on one meeting with the Committee on ways and means .... and talk to them about this subject.

It wasn't going to work that way anyway... it would have provided the break to your employer.But the employer in turn hands over the money to the employee. It is a hassle for employers and that is why many do not provide the benifit to employees for the current approved commute methods (like parking, bus and train passes).

If parking is an employee benifit and your company has to pay monthly for a parking pass for each employee, try seeing if you can get the monthly cash rather than the parking card. That is what is working for me.
Not to mention, our parking fee went up Jan 1, 08 from $75 to $100 per month.:D:beer:$$$

It wasn't going to work that way anyway... it would have provided the break to your employer.

Well, if it ever happens, my employer can keep it. They can use it to have the carpets cleaned from me dragging my snow and crud covered bikes through the halls and into my office. :p

Well, if it ever happens, my employer can keep it. They can use it to have the carpets cleaned from me dragging my snow and crud covered bikes through the halls and into my office. :p

hehe, I take my bike up an elevator to the 5th floor and by the time it reaches the storeroom (even if I've slammed the bike down a few times down on the sidewalk to excise the snow/slush) there's always the clump that blobs off. :)

OTOH, someone was telling me that NYS was looking into this - but I have yet to find anything about this.

Think of the state & federal fuel taxes you AREN'T paying, when you ride your bike.
I'd rather not pay a tax in the first place instead of having the gov. give me back part of it.
Where would these rebates come from? Taxpayers!

Think of the state & federal fuel taxes you AREN'T paying, when you ride your bike.
I'd rather not pay a tax in the first place instead of having the gov. give me back part of it.
Where would these rebates come from? Taxpayers!

Amen. Whatever refunds they might offer, would, I assume, be to encourage using less gas and thus easing demand, decreasing wear and tear on the roads, contributing less to pollution, etc. If all these problems are caused by gas-driven vehicles, pay for them out of taxes levied against gasoline. You haven't just encouraged commuting to work. You've encouraged alternative transportation and mass transit for all purposes.

Encouraging favourable behavior is good, but if you want to effect change, I would think that providing disincentives for the undesirable behaviors would be better.

Think of the state & federal fuel taxes you AREN'T paying, when you ride your bike.
I'd rather not pay a tax in the first place instead of having the gov. give me back part of it.
Where would these rebates come from? Taxpayers!

This is an interesting comment.

I agree with it 100%, but as a fan of "use taxes" or "user fees" over income taxes, it makes me wonder about something.

It seems to me that the government can only subsidize biking to a certain point. For every person who rides a bike to work, the government gets less money in gas taxes. And if they are subsidizing biking at the same time, then they are really starting to lose money. Granted, the proposed credit isn't huge, but at a certain point something has to give.

A similar situation popped up a few years ago. With consumers starting to purchase more fuel-efficient vehicles, some states were considering replacing the gas tax with a "mileage tax"... taxing you per mile driven. Although, it wasn't very popular with the public and I don't think it got anywhere.

I offer no answers... I just present a puzzle (at least, its a puzzle in my mind).

-Jason

Oregon is "investigating" the mileage tax. Motor vehicles would be equipped with a GPS device to track miles traveled and who knows what else they would track!
You'd pay the same tax per mile if you were driving a Hummer or a Prius! Totally stupid!
It amazes me to see how much fuel is wasted in drive up windows across the country. People will idle their vehicles for 15 minutes in line at Taco Bell etc. Park it and walk in!

This is an interesting comment.

I agree with it 100%, but as a fan of "use taxes" or "user fees" over income taxes, it makes me wonder about something.

It seems to me that the government can only subsidize biking to a certain point. For every person who rides a bike to work, the government gets less money in gas taxes. And if they are subsidizing biking at the same time, then they are really starting to lose money. Granted, the proposed credit isn't huge, but at a certain point something has to give.

The issue is actually much more fundamental than this (although it's a valid consideration). How exactly does one determine the subsidy that a "bike commuter" is entitled to? If you offer someone a rebate when they buy the bike, it may well just sit in the garage unused. There's no accurate way to measure just how much someone is actually riding the thing to work.

The idea of a tax-break for bike commuters is all very well in theory, but it all falls apart when one takes an honest look at the tax system and starts to plug figures in. First of all, you only get a tax-deduction on amounts you actually spend. Given that the maintenance on a bike is already considerably cheaper than that of a car, a sizeable chunk of the deduction is gone right there. Now here in Australia, most working individuals have an income that has them on a 30% marginal rate of tax. So take 30% of your deduction to get the real tax saving (because you would have only been paying 30% of your income to the taxman anyway). And don't forget, if you're playing by the rules, you can only count the wear and tear that accures over commuting miles -- and not your weekend club rides or multi day bike tours.

At the end of the year, the amount that ends up in your pocket is very small. It's virtually negligible when you consider that bicycling to work is already cheaper than driving to work by $5-10,000 in most cases. Frankly, if the existing savings aren't going to entice more people to ride to work (which may or may not be a good thing for those who currently do), then this policy certainly won't. That's probably the real reason it got voted down.

This is an interesting comment.

I agree with it 100%, but as a fan of "use taxes" or "user fees" over income taxes, it makes me wonder about something.

It seems to me that the government can only subsidize biking to a certain point. For every person who rides a bike to work, the government gets less money in gas taxes. And if they are subsidizing biking at the same time, then they are really starting to lose money. Granted, the proposed credit isn't huge, but at a certain point something has to give.

This is why I feel like taxes should be more closely tied to how/where they will be used. If you're using gas taxes to pay for things like road repair and countering the effects car-created pollution (not that they are, but wouldn't it be nice) then the fewer cars on the road, the less the need for those taxes. And if the cost of any gas-related activities becomes too high, those costs get passed back to consumers via the gas tax, further encouraging them to ease off the gas use. I'm sure that system would be difficult to implement, too, but it makes more sense to me than a credit towards non-car drivers.

Hey, I wasn't necessarily advocated for tax breaks, but would certainly take advantage of them if available. I do agree that the gas tax should be higher as a disincentive to driving motor vehicles. But what really irks me is that our government continues to give fairly substantial tax breaks to people who buy Hummers and other gas hogs that they supposedly use in their jobs. This is a crime.

Oregon is "investigating" the mileage tax. Motor vehicles would be equipped with a GPS device to track miles traveled and who knows what else they would track!
You'd pay the same tax per mile if you were driving a Hummer or a Prius! Totally stupid!
It amazes me to see how much fuel is wasted in drive up windows across the country. People will idle their vehicles for 15 minutes in line at Taco Bell etc. Park it and walk in!

That sounds terrible. So balsy, big brother is going to come right out and tell you that your every movement
in the car will be under surveillance.

Think of the state & federal fuel taxes you AREN'T paying, when you ride your bike.
I'd rather not pay a tax in the first place instead of having the gov. give me back part of it.
Where would these rebates come from? Taxpayers!

+1

Seems like you should be living in eastern Oregon ;).

Yep, 100% agree. Gee, thanks for giving me back what was mine in the first place. Especially since you need it sooo much more than I do.

Hey, I wasn't necessarily advocated for tax breaks, but would certainly take advantage of them if available. I do agree that the gas tax should be higher as a disincentive to driving motor vehicles. But what really irks me is that our government continues to give fairly substantial tax breaks to people who buy Hummers and other gas hogs that they supposedly use in their jobs. This is a crime.

I hear you. I actually heard a part of a story where some official was lamenting the lost revenue from taxes as cars become more fuel efficient. I didn't get the whole story, but I call B.S. anyway :) . For one thing, cars aren't really all that more fuel efficient. I actually find them to be surprisingly inefficient, except for hybrids (and if you want to make up for lost revenue on hybrids, tax the batteries just like you do the gas). Almost every time I see a commercial where they're boasting about their new, more fuel efficient cars, they're always touting milage very similar to what I get in my 1991 Ford Escort Wagon. Sorry, if my ten year old car even comes close to the new one, then they haven't been trying for fuel efficiency at all. Also the price of gas has shot up. So, assuming any gas taxes are done on a percentage basis, they should still be coming out ahead even if people were buying less gas.

All the gas taxes I have seen have been per gallon.

there is just no way to regulate, who commutes and who does not. The best thing they can do is eliminate taxes on bikes sold. Now thats an incentive. The Ontario government, waived its 8% sales tax on all bikes under $1000.00. Not bad, although it should have been waived for bikes under $1500

I just estimated my 10 cent/mile deduction we to get in NJ and came up with about $160, hardly worth itemizing. anyone deduct this, is it really that miniscule? Maybe I could get taxpayers to subsidize a new bike like an SUV, I could buy a top of the line commuter and still have $86,000 left over for to invest in stimulating the economy! From CBS news: "It’s a highly stimulating provision in the administration’s economic stimulus program. The loophole would allow someone who buys an $102,581 Hummer H1 for “business purposes” to deduct $87,135 from his taxes immediately. Seriously." http://www.cbsnews.com/stories/2003/01/23/opinion/meyer/main537649.shtml

Naw that subsidy isn't that great. They high income person still ends up paying $68,947 for the hummer and a lower income person would end up saving paying more because they have less taxes. A $300 tax deduction or a $2,000 tax deduction still will probably mean I take the standard deduction because itemizing won't get me any better.

You gotta get the Arizon Alternate Fuel Tax credit from back in the late 90s. 30k tax credit on bi-fuel vehicle. Free truck or sub 10k SUV anyone? ;) http://www.freerepublic.com/forum/a39f3a12054e3.htm

I got a tax credit last year on installing my solar hot water heater why not my commuter bike? :(

ChipSeal found this article, and because it seemed on topic for this thread, he bumped the thread.

California has passed this law: "If your place of work has 50 persons or more employed for them and subsidizes leased parking for you and your fellow employees, then they must participate in the Parking Cash-Out program, offering you a cash allowance in lieu of a parking space."

ChipSeal says that more can be found here:

http://www.carectomy.com/index.php/Politics/In-California-it-Pays-Not-to-Park

Don't know if this is new or not to those of you who commute by bike, but my CPA sister sent me this info:

Bicycle fringe benefit (Code Sec 1.32(e(t)(D)): Starting in 2009, employees who bicycle to work may exclude from gross income employer reimbursements of up to $20/month to cover the cost of buying, repairing, and storing a bicycle.

Dead Horse. Good luck getting your employer to initiate the program!!!