APTA: Transit tax benefit disparity looms

Americans who ride public transportation will face increased commuting costs if Congress does not act to extend the transit commuter benefit by the end of the year, according to a statement issued Tuesday by the American Public Transportation Association.

APTA said the move would “create a disparity in the federal tax code in favor of the car driver.” A failure to extend a transit benefit also “will hit the very workers who may need it the most,” APTA said, noting 70% of those who are transit reliant have household incomes from $15,000 to $99,000 a year, according to APTA’s latest demographic survey of riders.

“Unless Congress acts, there will be a financial bias in the federal tax code against public transit use,” said APTA President Michael P. Melaniphy. “We are seeking to maintain parity with the parking benefit to ensure that there isn’t a disincentive to take public transportation.”

Legislation to temporarily establish parity between parking and transit/vanpool benefits at $230 per month per commuter was extended under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act through 2011. However, APTA said, the transit/vanpool portion of the benefit will revert to $125 per month when the provision expires at the end of the year while the parking benefit increases to $240.

APTA is calling on Congress to act now to permanently extend the maximum transit commuter tax benefit to the level equal to the parking tax benefit.

“If the transit commuter benefit is allowed to expire, it will serve as a tax increase on transit riders and their employers,” said Melaniphy. 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.”

In the long term, APTA is urging transit riders to urge support of Rep. Jim McGovern’s (D-Mass.) legislation in the House of Representatives, paired with a similar Senate bill sponsored by Sen. Charles Schumer (D-N.Y.), to permanently extend parity for this benefit.