Tuesday, October 7, 2008

Apparently you can help solve the current credit crisis

One of the provisions in the recent TARP (more commonly referred to as the Wall Street bailout package) legislation is a new provision enabling you as an employer to pay certain qualified benefits to encourage your staff to bicycle to work.

You can pay up to $300 per year (total) based on the number of “qualified months” (to be defined) an employee uses their bicycle to commute to and from work. This amount will be considered as a tax-free commuter benefit to the employee.

For those firms with government contracts, the commuter benefit costs are allowable costs under FAR contracting rules, so you depending on your percentage of government contracts, the government will reimburse you for this cost, plus pay you an increased fee (profit) based on your higher costs.

Apparently, this provision was one of the key add-ons to the bill to obtain passage in the House. It was not included in the version defeated by the House, and was added by the Senate to the version that finally passed both the House and the Senate.

Since Congress has not yet begun to address the funding crises in Transportation, perhaps this provision is a precursor to a new transportation environment where bicycles are the main source of transportation alternatives available.

The TARP legislation does renew some alternative energy credits, so expect alternate energy to help pull us out of our slump.

We looked for other provisions in TARP to try to find other areas where we could contribute to a better economy, but we don’t think our profession can be of much assistance in most of the other provisions. Frankly, the tax exemptions for makers of children’s arrows or manufacturers of Rum just do not seem to be areas where our profession can be helpful.

Your country is apparently depending on you to solve the credit crisis by promoting more bicycle commuting.

Bill Fanning

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