Tax-free employee transit benefits emerged in the 1970s along with monthly pass plans and evolved over a 30-year period to be an important part of transit marketing, transit revenue, and traffic mitigation strategies. Transit benefit plans succeeded partly because they are an “offset” to employer-provided tax-free parking, an integral part of transit’s market context in theoretical and practical terms. First authorized in 1984 at a tax-free monthly maximum of $15, transit benefit legislation was expanded numerous times and now allows a monthly maximum of $230, equaling tax-free parking. Indicating the effectiveness of workplace market development, transit benefit impacts greatly exceed what comparable changes in transit fare levels suggest. A series of innovations for delivering transit benefits and unique public-private relationships provided ever-better ways to meet employer needs, and will continue to evolve as transit fare collection methods advance.
Baker, Stuart M., et al.
Tax-Free Transit Benefits at 30: Evolution of a Free Parking Offset.
Journal of Public Transportation, 13 (2): 1-22.
Available at: http://scholarcommons.usf.edu/jpt/vol13/iss2/1