The Parking Minute

A minute of parking news and commentary

Transit

Should transit benefits be taxed more than parking benefits? Let the IRS know what you think.

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There’s another opportunity to tell the IRS how you feel about parking taxes and transit benefit taxes, comments are due on Friday, June 7.

Buried in the Trump Tax Cuts was an esoteric change to how fringe benefits for commuters are taxed. Prior to the cuts, employers could provide free parking or free transit passes, up to a little more than $250 a month as a non-reported non-taxable fringe benefit. But after the tax cut went into effect, transit and parking benefits would be taxable to the employer at the corporate tax rate, even if the employer was a non-profit hospital, university, or charity. This could lead to many employers ending transit benefits. It might not be so bad if parking was really taxed the same way, but it isn’t.

Some employers, mostly in urban centers, pay third parties for employee parking, those employers would have to pay corporate taxes on the cost of parking, but employers with their own parking, or bundled parking in their suburban office park leases, would pay much less, or nothing, based on IRS guidance issued last year.

Having received many comments, the IRS is now asking the public to weigh in on what tax issues that we think should be their priority to work on this year. 

This could really be a very damaging thing for transportation demand management programs and other efforts to reduce single-occupancy commutes.  The Coalition for Smarter Transportation has a page with more information, read up a little and comment, your bus pass could depend on it.

Don’t waive parking requirements near transit, just waive them everywhere.

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When cities reform their parking requirements, they often implement new rules reducing or waiving on-site parking based on a new project’s proximity to transit. But, just like ratios that came before them, these rules seem arbitrary and based on gut feeling rather than any real evidence.

In some cities, the ratio is based on proximity to bus stops, in others it’s how close it is to the street where the bus runs.  In some cities 351 feet is too far away to waive parking requirements, in others 501, and in others 1321 feet. Some cities treat light rail different than buses, others allow a waiver for planned transit. In most cities the bus or transit needs to run frequently enough for the site to qualify for a waiver, but “frequent service” means something different everywhere you go.

In this map of Portland, the areas in blue are “close enough” to qualifying transit and parking is not required. Many areas excluded are transit-rich walkable communities. Source: City of Portland

Proximity based rules like this are a lazy way to make reforms. A map of areas that qualify for a waiver in Portland, Oregon shows voids in the waiver area that are walkable, bike able, transit rich neighborhoods full of amenities, but just a couple steps outside an arbitrary boundary. Meanwhile, areas with wide streets, few sidewalks, and strip-mall development patterns are in the waiver zone because a light rail stop happens to be 1/4 mile away.

In this example, a new development may be saddled with a 1:1 parking ratio because it is 70 feet “too far” from a bus line. The site is in the middle of a bike network, which would be degraded by the addition of 244 more cars to the neighborhood.

Such mobility based rules rarely account for bike networks, walk-scores, or bike-share amenities. Frequency rates are often based on commute times to city centers, only, discounting the idea that people might want to work near where they live so they don’t have to drive or take the bus. 

While these reforms are better than nothing, the one-off problems they cause aren’t worth the trouble. Developers will build parking if their projected tenants will demand it. If cities are managing their on-street parking, there’s no free lunch for anyone and there’s no need for an arbitrary rule telling people how far they can walk to a bus before they’re forced to pay for parking whether they use it or not.