As the end of 2013 approaches, Congress again faces a familiar slate of issues to address before certain tax laws expire, including several that remain important to the public transportation industry.

 

As part of the “fiscal-cliff” resolution bill, last January Congress extended a temporary increase to the transit fringe benefit, a move that maintained parity between the fringe benefits for parking and those for transit at $245 per month for another calendar year. But on Dec. 31, the temporary increase to the transit benefit will expire unless Congress takes further action. If this temporary increase expires, the transit benefit will drastically drop to $125 per month while the parking benefit is likely to increase from its current level after a cost-of-living adjustment.

 

The temporary increase to the transit benefit adopted last January was limited to one year in large part because Congress desired to complete a large tax reform package, including examination of a long list of provisions commonly known as tax extenders. The transit benefit has been included in efforts to extend these tax provisions. As prospects for enacting comprehensive tax reform before the end of the year decline, APTA and its members are urging Congress to extend, either permanently or for an additional year, the parity between the parking and transit benefits.

 

“We are seeking permanent parity with the parking benefit to ensure that there isn’t a disincentive to take public transportation,” said APTA President & CEO Michael Melaniphy. “If parity between the transit and parking benefit is allowed to expire, it will serve as a tax increase on transit riders and their employers. It will amount to allowing payroll taxes to increase on both employees and the employers who offer the benefits. People should have reasonable transportation choices and federal tax law should maintain a level playing field for those choices.”

 

Transit benefits champions, Sen. Charles Schumer (D-NY) and Rep. Michael Grimm (R-NY), have each sponsored bills in their respective chambers that would provide permanent parity between transit and parking benefits. Schumer introduced S. 1116, The Commuter Benefits Equity Act of 2013, and Grimm introduced H.R. 2288, The Commuter Parity Act of 2013.

 

Another critical tax provision scheduled to expire at year’s end is the Alternative Fuels Tax Credit, which helps public transit agencies of all sizes that operate compressed natural gas (CNG) or liquefied natural gas (LNG) vehicles defray the higher costs of procuring and maintaining more modern, environmentally friendly CNG/LNG vehicles and related equipment.