Transit and Vanpool Benefits Tax Exemption Information by State Jurisdiction

States differ in whether they allow Federally-exempted qualified transportation fringe benefits to be exempt from state income taxes as well. A "conforming" state means that its definition of taxable income conforms to that of the Federal government, while a "nonconforming" state uses its own definition. In nonconforming states, qualified transportation fringe benefits may be subject to state income tax. Therefore, please consult with a qualified tax specialist before making any determinations as to your specific tax circumstances. As of April 15, 2002
State	Conforming	Non-Conforming	No State Income Tax	Tax on investments & dividends only
Alabama	X
Alaska			X
Arizona	X
Arkansas	X
California	X
Colorado	X
Connecticut	X
Delaware	X
District of Columbia	X
Florida			X
Georgia	X
Hawaii	X
Idaho	X
Illinois	X
Indiana	X
Iowa	X
Kansas	X
Kentucky	X
Louisiana	X
Maine	X
Maryland	X
Massachusetts1	X
Michigan	X
Minnesota	X
Mississippi		X
Missouri	X
Montana	X
Nebraska	X
Nevada			X
New Hampshire				X
New Jersey		X
New Mexico	X
New York	X
North Carolina	X
North Dakota	X
Ohio	X
Oklahoma	X
Oregon	X
Pennsylvania		X
Rhode Island	X
South Carolina	X
South Dakota			X
Tennessee				X
Texas			X
Utah	X
Vermont	X
Virginia	X
Washington			X
West Virginia	X
Wisconsin	X
Wyoming			X
Source: Federation of Tax Administrators 1 Although Massachusetts is a conforming State, it does not adopt the Federal gross income exclusion for pre-tax transit and vanpool benefits. Therefore, if an employee's salary has been reduced by a transit pass or vanpool benefit (pretax), then the employer must add back the exclusion amount in the employee's W-2 for Massachusetts tax purposes.