Few businesses claiming tax credit for mass transit

Franchot touts perk for employers whose workers use public transportation

Franchot (D) said the program could be especially helpful to businesses dealing with the consequences of high gasoline prices and increased traffic.

"There's immediate relief available today," he said at a press conference Monday at the Bethesda Metro station.

Franchot and other officials joined representatives from the business community to encourage businesses to apply for the Maryland Commuter Tax Credit Program, which provides a 50 percent tax credit for the cost of providing employee commuter benefits of up to $50 per employee per month.

Eligible expenses for the program include fare cards and other payments for public or private mass transit; vanpools for vehicles with a seating capacity of at least eight; the Guaranteed Ride Home program that allows employers to offer transportation such as taxis and rental cars to employees participating in commuter benefits programs; and the cash in lieu of parking program.

Both individuals and businesses can claim the credit against the financial institution franchise tax or the state income tax. Insurers may claim a credit against the insurance premium tax. Nonprofits are also eligible to claim the credit.

"I emphasize, this is a credit, not a deduction," Franchot said. "It's in every business's interest."

Kathy Torrence, a vice president at the Calvert Group in Bethesda, said her company's participation in the program was a small part of trying to improve the quality of life for employees.

"Transportation is a big issue, and there's not one solution for it," she said.

Asked if so few businesses had participated in the tax credit program because it wasn't suited to their needs, Franchot responded, "It just hasn't been publicized in the right way."

He added that further testing of the program would be required before any consideration of expanding the tax credit.

The program was adopted by the legislature in 1999.

Karen McManus, a constituent services representative for Rep. Christopher Van Hollen (D-Dist. 8) of Kensington, noted that if more businesses do not apply for the tax credit, further outreach will be needed to see if the program should be modified.

"There should be some effort to say, ‘Why aren't you doing this?'" she said.

County Councilman Mark Elrich (D-At Large) of Takoma Park said many businesses were simply unaware of such programs and in other cases were not willing to deal with the paperwork.

"You would think they would be interested," he said.

Local officials said the state tax program should be used in conjunction with other programs, such as Montgomery County's Super Fare Share, which allows local businesses to claim up to $270,000 over nine years for employee commuter benefits.

Del. William A. Bronrott (D-Dist. 16) of Bethesda said high gas prices have served as an alarm for people and their employers to see transportation problems more clearly and help achieve bottom-line goals of reducing overall congestion and protecting the environment.

He said the way the state's transportation system, which has been engineered to favor one-passenger vehicles, has made the job of promoting mass transit for workers and businesses more difficult.

"The tax credit program is a means to an end," he said.