Pols push to extend commuter tax break

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by Claude Solnik
Long Island Business News

November 13, 2013

Legislators are pushing to extend a mass transit tax benefit set to be cut nearly in half at the end of year, with a particularly large impact on Long Island companies and employees.LIRR commuters

U.S. Senator Charles Schumer, who wrote the original legislation expanding the benefit as part of the economic stimulus package, on Monday called for the federal government to extend or make the benefit permanent at existing levels.

Schumer said more than 700,000 commuters in the New York metropolitan area use the transit benefit, which saves tristate commuters about $330 million annually.

He called for Congress to pass the Commuters Benefit Equity Act before the end of the year and said he might seek to include it in a larger tax bill.

Rosemary Mascali, manager of Transit Solutions, a mass transit advocacy group in Manhasset, also called for the extension of the benefit.

She said Long Islanders who commute to New York City, reverse commuters and others tap the benefit – which many use to cut the cost of Long Island Rail Road commutes.

“It’s going to be the equivalent of a 15 to 20 percent fare hike for Long Island Rail Road riders,” Mascali said. “They save about $50 a month. If the railroad hiked the fare 15 to 20 percent, there’d be a lot of people angry and upset.”

Organizations such as the North Shore-Long Island Jewish Health System offer the mass transit benefit to employees.

Roughly 15,000 companies in New York offer the transit benefit covering more than a half a million employees, according to Transit Center.

The provision, known as Federal Qualified Transportation Fringe Benefits, lets companies offer mass transit and vanpool tax-free benefits up to $245 through the end of this year.

But the transit benefit, increased under The American Taxpayer Relief Act of 2012, is set to fall back to $125 at the end of the year.

While current law treats transit and parking benefits equally, the mass transit benefit will revert to roughly half of the parking tax benefit.

The American Public Transportation Association supports creating “permanent parity between public transportation and parking fringe benefits.”

Mark J. Epstein, chairman of the Long Island Rail Road Commuters Council, earlier called for the government to make the transit benefit permanent to help workers “who need to make every commuting dollar count.”

 “The transit fringe benefit not only assists transit riding workers, but also supports employers, including many small businesses,” said Michael Melaniphy, the association’s CEO.

He said that employers who offer pre-tax transit benefits save on reduced payroll taxes and use the benefit to recruit and retain employees.