In an
effort to overcome some of the challenges related to building additional
highways and vehicle pollution, the State of Washington has enacted some
legislation to address these issues. For example, the State of Washington
sought to reduce its road building costs by offering credits to employers, to
partially offset payments the employers would make to workers for participating
in ride-sharing programs. In 1996 there
were some changes made to the original legislation. These changes are
authorized by Second Substitute Senate Bill (2SSB) 6260, Chapter 128, Laws of
1996. Prior to the 1996 changes, the
program was restricted to specific counties and employers who had over 100
employees. The maximum amount of credit available statewide for the total
program was $2 million and the limit for each employer was $200,000 per year.
Now the program is available to all employers anywhere in the state. However,
the maximum amount available statewide has been lowered to $1.5 million per
calendar year and the limit each employer may use is $100,000 per calendar
year. The program extends through December 31, 2000. Some of the requirements and limitations are as follows:
Employers must provide ride-sharing incentives to their
employees. Bus and ferry passes are eligible incentives.
Employers located anywhere in the state are eligible—there are no geographic
restrictions.
Employers must segregate ride-sharing into two categories, vehicles with two
passengers, or vehicles with three or more passengers, public transportation,
or non-motorized commuting.
The
credit may not exceed $60 per employee per calendar year. The credit is
calculated as follows:
Two employees per vehicle—multiply the amount paid to or on behalf of the
employee by 30 percent. Three employees
or more, public transportation, or non-motorized commuting—multiply the amount
paid to or on behalf of the employee by 50 percent. There are some additional
requirements to be eligible for the credit.
Employers must maintain a record of how much, and to which employee,
incentives are paid to or on behalf of.
No one employer may use more than $100,000 of the available $1.5 million
credit per calendar year. The credit may be claimed
only once a calendar quarter (i.e. Quarter 1 - March). The same credit cannot be claimed for both
B&O and Public Utility taxes. The
credit may not exceed the amount of B&O or Public Utility tax due on the
return. The credit must be claimed on a
tax return for the calendar year in which the incentives are paid to or on the
behalf of the employee. The credit may
not be claimed on returns that are filed after the due date for the last return
of the calendar year. To claim the credit, an employer must contact the
Telephone Information Center or write to Communications@dor.wa.gov and ask for the Ride Sharing
Credit Reporting Schedules. One schedule is for 1996 only. The other is for the remaining years.
You must complete one of the schedules every time you claim the credit. Employers should make copies of the form for future use.
In 1999 some changes were made to the original
law. The substitute Senate Bill (SSB)
5781 (Chapter 402, Laws of 1999) enhances the ride share tax incentives for
persons who provide ride sharing incentives to their employees and extends the
credit to property managers who meet the eligibility requirements. The ride
sharing tax credit incentives are effective as of July 25, 1999. The annual
state maximum is the lower of $2.25 million or the amount provided from the air
pollution control account, appropriations from the transportation account, or
the public transportation systems account.
There are now three ways to calculate the amount of credit available to
employers. The first method is for
employers that provide assistance to employees that utilize the same vehicle,
public transportation, or non-motorized transportation. For these employers, they multiply the
amount paid as a benefit by 50% to calculate their credit amount. The second method is for property managers
that provide the same benefit to their employees. The property managers get a full credit for amounts paid to three
or more employees utilizing the same vehicle.
The last method is for employers and property managers that provide a
benefit to 2 employees utilizing the same vehicle. In this case, the credit is calculated by multiplying the amount
paid by 30%.
This issue came to my
attention after visiting the web page for the Friends of the Earth web page at www.foe.org/envirotax/taxbooklet/index.html. On
their web page they claim that nearly $1 million in credits were claimed, and
the program drew the participation of some 55,000 employees. This program gets
people to work for about a third of the cost of building new highways to accommodate
the same traffic. This same web page
lists a number of other methods utilized by the state of Washington and other
states to effect environmental policies of companies. They also cover some of the efforts made by other countries to
use the tax code to effect environmental behavior of corporations.
