Food as Fuel: If You Bike To For Work, Is Your Lunch Tax Deductible?
by Lloyd Alter, Toronto on 07.28.08
the late Peter Jennings on food as fuel
TreeHugger complains often about food as fuel, but what about if it really is exactly that? If you use your car for business purposes, then fuel can be a legitimate deductible expense, so what if you use your bike? We looked at this three years ago, but with more people cycling longer distances for work, we raise the issue again.
According to Bikes at Work, moderate cycling burns about 300 calories per hour in excess of what a sedentary worker might burn. So if you bike for a living, or to meetings, shouldn't the food consumed to deliver those calories be considered fuel? In Canada, it is.
Wayne Scott receiving award from Jack Layton, then a City Councillor in Toronto
Ten years ago, bicycle courier Wayne Scott fought Revenue Canada (the Canadian version of the IRS). The Judge wrote (in 1997!)
"Just as a courier's automobile requires fuel in the form of gas to move, the applicant alleges that he requires fuel in the form of food and water. The foot and transit courier and the automobile courier are engaged in identical activities the only difference being one uses a car as a means of transport and the other his body or a bicycle. Because the courier who drives the automobile is allowed to deduct his or her fuel, the foot and transit courier should be able to deduct the fuel his body needs. However, because we all require food and water to live, he can only deduct the extra food and water he must consume above and beyond the average person's intake in order to perform his job. This is similar to the automobile courier who is only entitled to deduct that portion of the fuel used for a business purpose. The extra fuel consumed for personal needs cannot be deducted. This result takes into account the different methods by which the same job is done and puts all couriers on an equal footing. Arguably, it also recognizes and encourages [rather than discourages as a prohibition on this expense would] new environmentally responsible ways of producing income."::Alan Wayne Scott vs Canada
Revenue Canada now lets bicycle couriers deduct $17 per day for food without receipts. In the UK, cycle couriers can deduct £6.50 per day. (which buys a lot less food than C$17!)
However in the United States, Tax lawyer Paul Caron quotes a letter from the IRS's office of Chief Counsel: "
Expenditures for food, the "fuel" for all human activities, whether or not business related, are considered inherently personal in nature. Therefore, the cost of food generally is not deductible as a trade or business expense unless it is paid or incurred while traveling away from home overnight or, under some circumstances, in connectior with business entertainment.
The courts have consistently agreed with this position. For example, the Board of Tax Appeals in Smith v. Commissioner, 40 B.T.A.1038 (1939), aff'd per curiam, 113 F.2d 114 (2nd Cir. 1940), stated at pages 1038-39:
[T]he cost of the laborer's raiment... the very home which gives us shelter and rest and the food which provides energy, might all... be construed as necessary to the operation of business and to the creation of income. Yet these are the very essence of those "personal" expenses the deductibility of which is expressly denied."
So once again, in America, the system is biased towards four wheels and against two. Time for a change!
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It's not if you bike TO work, it's if you bike FOR work, as a messenger, pedicab driver, etc.
Sure, it seems fair that folks who use bikes for business purposes be allowed to deduct their food as a fuel expense. Of course, anyone else with a physically demanding job should then be allowed to do the same (construction workers, landscapers, janitors). And it's not an incredible stretch of the same logic to suggest that motor vehicle fuel taxes should then apply to the additional food that any cyclist consumes, whether the bicycle is ridden for business purposes or not.
Even though I am definitely a bike advocate, I must agree with dokein, completely. Also, I don't know what prices are like in Canada, but in the United States, that $17 deduction that Revenue Canada allows would buy more donuts at Tim Horton's than I could "burn" by biking in any 24 hour day!
Seriously, you should change the headline to this post. The first comment is exactly right, the cost of fuel (whether gas or food) used to commute to or from work is not deductible as a business expense. The only argument is that extra food above the amount that would normally be eaten, which is eaten on account of a bike messenger's job, could be deductible. But, as professor Caron points out, there's no real support for the argument under US law.
Great article and thought provoker. I'm going to go brainstorm now...
What about those of us who walk to work? Biking is not the only form of transportation that requires food as fuel.
You should check exchange rates before you make a statement such as this: "Revenue Canada now lets bicycle couriers deduct $17 per day for food without receipts. In the UK, cycle couriers can deduct £6.50 per day. (which buys a lot less food than C$17!)"
At today's exchange (http://www.xe.com), £6.50GBP equals $13.19CAN. Less, yes, but I would not say "a lot less", it's about 23% less.
My 2¢US.
Michael
LA: I have tried eating in london, and there is more to money than exchange rates, there is also purchasing power parity. I suspect that £17.00 doesn't buy a whole lot more food than $17.00 CDN. In fact when I go to London I just pretend that a dollar is worth a pound, or I don't eat or get on a subway train. When I made my comment I was taking that into account.