Commuter Tax Benefits
Commuter Benefits Advocacy
At the start of the 119th Congress, a proposal to eliminate the Qualified Transportation Fringe Benefit (QTFB) in its entirety - including transit, vanpool, parking, and bicycle benefits - was floated as part of Republican cost-cutting efforts for the budget reconciliation process. Through sustained and strategic advocacy, ACT was able to protect transit, vanpool, and parking benefits, with the only draw being the bicycle benefit facing elimination.
While we’re disappointed that the bicycle commuter benefit was officially eliminated, ACT remains committed to advocating for its restoration in future policy discussions. Since the bicycle benefit has been suspended since 2017, ACT views this as an opportunity to create a more comprehensive micromobility benefit in the future. In pursuit of this goal, we have endorsed the Bicycle Commuter Act of 2025; a key piece of legislation modernizing and restoring the benefit. Safeguarding the remaining parts of the QTFB marks a significant win for TDM.
Equally significant was ACT’s role in blocking the return of the Unrelated Business Income Tax (UBIT) on nonprofits. Originally included in the House version, this provision would have imposed a 21% tax on nonprofit spending related to commuter benefits. ACT joined forces with key allies to ensure it was stripped from the Senate version, and ultimately, from the final bill.
For a comprehensive recap of ACT’s advocacy efforts on the bill, protecting commuter tax benefits, and removing the Unrelated Business Income Tax provision, see below:
January: Republican leadership releases “menu” of potential cuts for the reconciliation bill, including total elimination of the Qualified Transportation Fringe Benefit (QTFB).
February: ACT travels to DC to advocate for the protection of commuter benefits. ACT held meetings with Rep. Lawler (R-NY-17), Rep. Strickland (D-WA-10), Rep. Auchincloss (D-MA-4), Rep. Thompson (D-CA-4), Sen. Cramer (R-ND), Sen. Blunt Rochester (D-DE), and Sen. Welch (D-VT). ACT releases advocacy resources (call script, template letter, target list) for members to urge their representatives to protect commuter tax benefits.
March: House Republicans pass a budget resolution approving $4.5 trillion in tax cuts. House committees are tasked with identifying $2 trillion in spending reductions. ACT further intensifies our advocacy efforts to protect commuter benefits, specifically targeting moderate Republicans and Republicans on the House Ways & Means Committee (who oversee tax legislation in the reconciliation bill). ACT meets with Rep. Kean Jr. (R-NJ-7), Rep. Kim (R-CA-39), Rep. Malliotakis (R-NY-11), Rep. Issa (R-CA-48), Rep. Carey (R-OH-15), and Rep. Fitzpatrick (R-PA-1).
April: Senate Republicans pass their companion budget resolution. ACT meets with Sen. Sullivan (R-AK) and Sen. Blunt Rochester (D-DE).
May: House Republicans pass the “One Big Beautiful Bill Act” on May 22nd. Transit, vanpool, and parking commuter benefits are protected; the suspended bicycle commuter benefit is eliminated. In the bill, House Republicans reintroduce the Unrelated Business Income Tax, imposing a 21% tax on nonprofits (church-affiliated nonprofits exempt) for spending related to providing commuter tax benefits. The UBIT was passed in the 2017 Tax Cuts and Jobs Act but later repealed in 2019.
ACT continues advocacy to protect commuter benefits, but shifts focus to the newly introduced UBIT provision, urging Senators to remove the tax from their version of the bill. ACT meets with Sen. Murkowski (R-AK), Sen. Johnson (R-WI), Sen. Husted (R-OH), Rep. Strickland (D-WA-10), Rep. Pappas (D-NH-1), Rep. Knott (R-NC-13), Rep. LaLota (R-NY-1), Rep. Shreve (R-IN-6), and Rep. Hurd (R-CO-3).
Further, Sen. Welch (D-VT), Sen. Padilla (D-CA), and Rep. Thompson (D-CA-4) introduced ACT-endorsed legislation: the Bicycle Commuter Act of 2025.
June: ACT further pushes for UBIT removal. In addition to working with the American Society of Association Executives (ASAE) to remove UBIT, ACT met with Sen. Ernst (R-IA), Sen. Tillis (R-NC), Sen. Graham (R-SC), Sen. Ricketts (R-NE), Rep. Rouzer (R-NC-7), Rep. McBride (D-DE-At Large), and Rep. Wied (R-WI-8). Senate Republicans pass their version of the One Big Beautiful Bill. UBIT is ultimately removed from the Senate bill.
July: The One Big Beautiful Bill Act is passed in House & Senate and signed into law by President Trump. ACT’s advocacy efforts successfully protected the majority of commuter tax benefits and removed the harmful UBIT tax.
Further, our white paper details ACT's recommendations for enhancing and improving the benefit as it currently stands.
Commuter Tax Benefit Recommendations - White Paper
Beginning this work in 2024, ACT's Commuter Tax Benefits Work Group set out to create recommendations for enhancing and improving the current Qualified Transportation Fringe Benefit (QTFB). ACT's Board of Directors officially approved the group's recommendations, and we are excited to share our work with the broader membership. This white paper includes the history of the QTFB, why protecting and improving these benefits is critical for TDM, and a detailed explanation of our recommendations.
Please contact Government Affairs and Policy Manager Emma Wasserman with any comments or questions.