Sponsors (2)
Read twice and referred to the Committee on Finance.
Reinstates and expands a tax-free employer fringe benefit for bicycle commuting and related micromobility devices. The change defines qualified bicycle commuting benefits and covered property (bicycles, e-bikes, and certain scooters), sets a monthly cap equal to 30% of the relevant dollar amount, updates related wording in the tax code, and applies to taxable years beginning after December 31, 2024. The law lets employers provide a pre-tax benefit for employees who commute using covered devices, reduces employees' taxable income for those benefits, and requires employers and payroll systems to adopt the new definitions and monthly limit.
Repeals the suspension by striking paragraph (8) of Section 132(f) of the Internal Revenue Code of 1986.
Defines 'qualified bicycle commuting benefit' to include either (I) employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred during that calendar year for purchase (including finance charges), lease, rental (including a bikeshare), improvement, repair, or storage of qualified commuting property, or (II) the direct or indirect provision by the employer during the calendar year of the use (including a bikeshare), improvement, repair, or storage of qualified commuting property.
Defines 'qualified commuting property' to include (I) any bicycle (other than a bicycle equipped with any motor), (II) any electric bicycle, (III) any 2- or 3-wheel scooter (other than a scooter equipped with any motor), and (IV) any 2- or 3-wheel scooter propelled by an electric motor if the motor does not provide assistance above 20 miles per hour (or cannot exceed 20 mph) and the scooter weighs no more than 100 pounds.
Defines 'electric bicycle' to include a bicycle certified by its manufacturer, importer, or distributor to comply with the Consumer Product Safety Commission requirements under part 1512 of title 16, Code of Federal Regulations (or successor regulations).
Defines 'bikeshare' as a rental operation where qualified commuting property is made available to customers to pick up and drop off for point-to-point use within a defined geographic area.
Who is affected and how:
Employees and commuters who use bicycles, e-bikes, or qualifying scooters for travel to work stand to benefit directly by receiving a pre-tax employer fringe benefit that lowers their taxable income up to the monthly cap. This makes commuting by these devices relatively cheaper after taxes.
Employers that choose to offer the benefit must update compensation and payroll systems to provide and report the pre-tax fringe benefit and enforce the new monthly limit. Smaller employers may face administrative setup costs.
Micromobility device sellers and manufacturers could see modest demand effects if tax-preferred benefits encourage more employees to purchase or use e-bikes and qualifying scooters.
The federal government will forgo some tax revenue compared with fully taxable wages; the change is a tax expenditure rather than direct spending.
No new federal mandates on states or localities are imposed; participation is voluntary for employers. The change is narrowly focused on tax treatment and does not create or fund infrastructure, transit, or safety programs.
Overall, the measure is targeted: it primarily helps workers who commute using covered devices and employers that elect to offer the fringe benefit, while requiring administrative adjustments for payroll and benefits processing.
Last progress June 11, 2025 (8 months ago)
Introduced on June 11, 2025 by Peter Welch
Updated 1 day ago
Last progress June 11, 2025 (8 months ago)