TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, October 28, 2013

IRS: Bike Share Programs Are Not Tax-Free

CitibikeForbes:  Bike Share Programs Are Not Tax-Free, Says The IRS, by Robert W. Wood:

Along with other unpopular things the IRS has done recently, you can add treating bike share benefits as taxable. Bike share programs are primarily for short-term use in urban areas as alternatives to private vehicles, taxis or mass transit. Bikes are rented at one docking station and may be returned there or at any other docking station. The stated goals are reducing traffic congestion, noise and air pollution.

And are they tax-free? Nope, not according to the IRS. The IRS was asked to approve bike share as qualifying for the Transportation (Commuting) Benefits Program under Fringe Benefit Rules for transit. I’ll explain what this means, but the short answer is that the IRS says no. The IRS concluded that expenses an employee bears participating in a bike share program do not qualify for the favorable tax treatment provided for qualified transportation fringe benefits. [IRS Information Letter 2013-0032]

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Please explain why this matters (to an individual, not to a company) and quantitate the hypothetical individual tax benefit. Explain how an individual will be taxed. Sounds to me like simply another example of an over-complex tax code full of special pleading- not so much an example of IRS being anti-anything (environment, business, whatever) as another example of an overly regulated society with bureaucrats distorting behaviors.

Posted by: doc | Oct 29, 2013 7:37:04 AM