Authorizes the election of qualified transportation fringe benefits; authorizes any employer to offer employees the opportunity to use pre-tax earnings for the purchase of qualified transportation fringe benefits.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9116
SPONSOR: Rivera TITLE OF BILL:
An act to amend the tax law, in relation to authorizing the election of
qualified transportation fringe benefits
PURPOSE OR GENERAL IDEA OF BILL:
To allow employers in New York State the option of offering to employees
the option to use pre-tax earnings for the purchase of qualified fringe
benefits.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1, subsection a amends the tax law to add a new section defining
terminology around election of qualified transportation fringe benefits,
including bikesharing arrangements, employer, local government, quali-
fied transportation fringe benefits, and ridesharing.
Section 1, subsection b describes the benefits in lieu of taxable dollar
compensation.
Section 1, subsection c directs the department to create rules and regu-
lations necessary for the implementation of this section.
Section 2 establishes the effective date.
JUSTIFICATION:
Every year, employees use a variety of means of transportation to
commute to work. Typically, those costs are paid for out of pocket by
the employee and those costs are subject to applicable taxes. This would
allow employers to offer pretax commuter benefits to employees for any
transportation in a commuter highway vehicle between the employee's
residence and place of employment, any transit pass, qualified parking,
bicycle purchase or repair, transportation network company (TNC) prear-
ranged rides, bike- and ride-shares, and membership in any TNC, rides-
haring, or bikesharing membership program.
The commuter benefits program can provide savings for both employers and
employees. Employers can save by reducing their payroll taxes. The more
employees who sign up for transportation benefits, the more the employer
can save. Employers can also attract and retain employees, by offering
transportation benefits. Employees can lower their monthly expenses by
using pre-tax income to pay for their commute. This would bring the rest
of the state in closer alignment with a New York City commuter benefits
policy which has been in effect since 2016.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:.
This act shall take effect January 1, 2025.
STATE OF NEW YORK
________________________________________________________________________
9116
IN ASSEMBLY
February 7, 2024
___________
Introduced by M. of A. RIVERA -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to authorizing the election of
qualified transportation fringe benefits
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 49 to read
2 as follows:
3 § 49. Election of qualified transportation fringe benefits. (a) Defi-
4 nitions. For the purposes of this section, the following terms shall
5 have the following meanings:
6 (1) "bikesharing arrangements" means a rental operation at which bicy-
7 cles, as defined in section one hundred two of the vehicle and traffic
8 law; bicycles with electric assist, as defined in section one hundred
9 two-C of the vehicle and traffic law; or electric scooters, as defined
10 in section one hundred fourteen-e of the vehicle and traffic law, are
11 made available to pick up and drop off for point-to-point use within a
12 defined geographic area;
13 (2) "employer" means an entity, including but not limited to a corpo-
14 ration, nonprofit organization, partnership, joint venture, common trust
15 fund, limited association, pool or working agreement, local government,
16 or limited liability company, that employs three or more persons in this
17 state;
18 (3) "local government" means the same as such term is defined in
19 section three hundred eight of the real property tax law;
20 (4) "qualified transportation fringe benefits" means:
21 (A) any qualified transportation fringe benefit as that term is
22 defined in 26 U.S.C. § 132(f);
23 (B) TNC prearranged trips, as defined in section sixteen hundred nine-
24 ty-one of the vehicle and traffic law, or rides provided by bikesharing
25 arrangements or ridesharing arrangements for use by an employee in trav-
26 eling between the employee's residence, the employee's place of employ-
27 ment, or a mass transit facility that connects the employee to the
28 employee's residence or place of employment; or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14349-01-4
A. 9116 2
1 (C) membership in any transportation network company, ridesharing, or
2 bikesharing membership program;
3 (5) "ridesharing" means the vehicular transportation of passengers
4 traveling together primarily to and from such passengers' places of
5 business or work or traveling together on a regularly scheduled basis
6 with a commonality of purposes if the vehicle used in such transporta-
7 tion is not operated for profit by an entity primarily engaged in the
8 transportation business and if no charge is made therefore other than
9 that reasonably calculated to recover the direct and indirect costs of
10 the "ridesharing arrangement", including, but not limited to, a reason-
11 able incentive to maximize occupancy of the vehicle. "Ridesharing" shall
12 include "ridesharing arrangements" commonly known as carpools and
13 vanpools, but shall not include school transportation vehicles operated
14 by elementary and secondary schools when they are operated for the
15 transportation of children to or from school or on school-related
16 events.
17 (b) Election of qualified transportation fringe benefits in lieu of
18 taxable dollar compensation for certain employees. For taxable years
19 beginning on and after January first, two thousand twenty-five, any
20 employer may offer employees the opportunity to use pre-tax earnings for
21 the purchase of qualified transportation fringe benefits.
22 (c) Rules and regulations. The department may promulgate rules and
23 regulations necessary to implement and administer this section.
24 § 2. This act shall take effect immediately and shall apply to taxable
25 years beginning on and after January 1, 2025.
