Bailout gives Tax Break to Bicycle Commuters

Rachel Gordon, SF Chronicle Staff Writer

(10-08) 19:16 PDT -- The $700 billion bailout bill intended to stop the tailspin of the nation's financial sector did something else: It includes federal tax benefits for people who commute by bike.

Starting in January, workers who use two-wheelers as their primary transportation mode to get to and from work will be eligible for a $20-a-month, tax-free reimbursement from their employers for bicycle-related expenses. In return, employers will be able to deduct the expense from their federal taxes.

"It significantly legitimizes bicycling and elevates it to a credible commute mode, like riding a bus or train," said Andy Thornley, program director for the San Francisco Bicycle Coalition.

The money could be used to purchase, store, maintain or repair bikes that are used for a substantial portion of an employee's commute.

Bike advocates have been trying for seven years to get such a provision passed in Washington, but came up short until Congress rushed through the Wall Street bailout package last week and lawmakers squeezed in pet projects. The bicycle benefit was championed by members of the Oregon delegation.

Backers estimate that the federal tax rolls may lose out on about $1 million a year due to the new employer write-off, according to the advocacy group League of American Bicyclists.