In the latest version of the Tax Cuts and Jobs Act that awaits the President’s signature, employers will be taxed on amounts spent after December 31, 2017 on employee parking. For-profit employers that deduct expenses may not deduct costs for employee parking. Similarly, employers that do not deduct expenses (i.e., tax-exempt and governmental entities) will be subject to unrelated business taxable income on the expenses they incur for employee parking. For each of these entities, the results are the same: if you pay your employees $X in compensation and spend $Y on their parking, you will be subject to taxation on $Y.
This may be good news to employers that require their employees to pay for their own parking, as more employers might shift to that model, but any employer that pays for or offsets the cost of employee parking is faced with the tough decision of incurring taxable expenses or passing the cost on to employees.