RD58 - Utilization and Impacts of Commuter Benefit Tax Deductions For Businesses – January 2022

Executive Summary:

During its 2020 session, the General Assembly considered Senate Bill (SB) 277 establishing an individual and corporate income tax deduction for commuter benefits provided by an employer to its employees for the taxable years 2021 through 2025. If the legislation is enacted, private Virginia businesses will be allowed to take a Virginia corporate tax deduction for the costs associated with providing a Commuter Tax Benefit program to their employees. The deduction will be available only to the employer and limited to $265 per employee each month.

The bill included two enactment clauses. First, it required subsequent legislative action for the provisions of the bill to become effective. Second, it required the Virginia Department of Rail and Public Transportation (DRPT) to study the impacts of the legislative language and issue a report to the General Assembly by December 2020.

The General Assembly included language in its Biennial Budget allowing the Governor to delay legislative reports by one year due to the on-going COVID-19 pandemic; and DRPT subsequently elected to delay submission of this report.