Pre-Tax Transportation Benefit Mandate Passes State Senate

Legislation (S1567) that would require most employers to offer pre-tax transportation spending accounts passed the NJ State Senate by a 23-14 vote Thursday. A companion bill (A2425) has been reported favorably from committee in the lower chamber and is awaiting consideration by full Assembly.

The NJCUL has been working together with a group of other business trade associations including the NJ State Chamber of Commerce and NJ Business & Industry Association to oppose the legislation.

The bill requires New Jersey employers with 20 or more employees not subject to a collective bargaining agreement to offer those employees pre-tax transportation spending accounts similar to healthcare spending accounts.

The legislation defines the account as a pre-tax election transportation fringe benefit that provides commuter highway vehicle and transit benefits consistent with the provisions and limits of the U.S. Internal Revenue Code of 1986. The benefit allows an employee to set aside wages on a pre-tax basis, which is then made available to the employee for the purchase of certain eligible transportation services including transit passes and commuter highway vehicle travel.

The legislation also requires the NJ Transit, in conjunction with the NJ Turnpike Authority and the South Jersey Transportation Authority, to establish a public awareness campaign to encourage the public to contact employers about the benefits of pre-tax transportation accounts.