26 U.S.C. § 132 : US Code - Section 132: Certain fringe benefits

    (a) Exclusion from gross income
      Gross income shall not include any fringe benefit which qualifies
    as a - 
        (1) no-additional-cost service,
        (2) qualified employee discount,
        (3) working condition fringe,
        (4) de minimis fringe,
        (5) qualified transportation fringe,
        (6) qualified moving expense reimbursement,
        (7) qualified retirement planning services, or
        (8) qualified military base realignment and closure fringe.
    (b) No-additional-cost service defined
      For purposes of this section, the term "no-additional-cost
    service" means any service provided by an employer to an employee
    for use by such employee if - 
        (1) such service is offered for sale to customers in the
      ordinary course of the line of business of the employer in which
      the employee is performing services, and
        (2) the employer incurs no substantial additional cost
      (including forgone revenue) in providing such service to the
      employee (determined without regard to any amount paid by the
      employee for such service).
    (c) Qualified employee discount defined
      For purposes of this section - 
      (1) Qualified employee discount
        The term "qualified employee discount" means any employee
      discount with respect to qualified property or services to the
      extent such discount does not exceed - 
          (A) in the case of property, the gross profit percentage of
        the price at which the property is being offered by the
        employer to customers, or
          (B) in the case of services, 20 percent of the price at which
        the services are being offered by the employer to customers.
      (2) Gross profit percentage
        (A) In general
          The term "gross profit percentage" means the percent which - 
            (i) the excess of the aggregate sales price of property
          sold by the employer to customers over the aggregate cost of
          such property to the employer, is of
            (ii) the aggregate sale price of such property.
        (B) Determination of gross profit percentage
          Gross profit percentage shall be determined on the basis of -
        
            (i) all property offered to customers in the ordinary
          course of the line of business of the employer in which the
          employee is performing services (or a reasonable
          classification of property selected by the employer), and
            (ii) the employer's experience during a representative
          period.
      (3) Employee discount defined
        The term "employee discount" means the amount by which - 
          (A) the price at which the property or services are provided
        by the employer to an employee for use by such employee, is
        less than
          (B) the price at which such property or services are being
        offered by the employer to customers.
      (4) Qualified property or services
        The term "qualified property or services" means any property
      (other than real property and other than personal property of a
      kind held for investment) or services which are offered for sale
      to customers in the ordinary course of the line of business of
      the employer in which the employee is peforming (!1) services.

    (d) Working condition fringe defined
      For purposes of this section, the term "working condition fringe"
    means any property or services provided to an employee of the
    employer to the extent that, if the employee paid for such property
    or services, such payment would be allowable as a deduction under
    section 162 or 167.
    (e) De minimis fringe defined
      For purposes of this section - 
      (1) In general
        The term "de minimis fringe" means any property or service the
      value of which is (after taking into account the frequency with
      which similar fringes are provided by the employer to the
      employer's employees) so small as to make accounting for it
      unreasonable or administratively impracticable.
      (2) Treatment of certain eating facilities
        The operation by an employer of any eating facility for
      employees shall be treated as a de minimis fringe if - 
          (A) such facility is located on or near the business premises
        of the employer, and
          (B) revenue derived from such facility normally equals or
        exceeds the direct operating costs of such facility.

      The preceding sentence shall apply with respect to any highly
      compensated employee only if access to the facility is available
      on substantially the same terms to each member of a group of
      employees which is defined under a reasonable classification set
      up by the employer which does not discriminate in favor of highly
      compensated employees. For purposes of subparagraph (B), an
      employee entitled under section 119 to exclude the value of a
      meal provided at such facility shall be treated as having paid an
      amount for such meal equal to the direct operating costs of the
      facility attributable to such meal.
    (f) Qualified transportation fringe
      (1) In general
        For purposes of this section, the term "qualified
      transportation fringe" means any of the following provided by an
      employer to an employee:
          (A) Transportation in a commuter highway vehicle if such
        transportation is in connection with travel between the
        employee's residence and place of employment.
          (B) Any transit pass.
          (C) Qualified parking.
          (D) Any qualified bicycle commuting reimbursement.
      (2) Limitation on exclusion
        The amount of the fringe benefits which are provided by an
      employer to any employee and which may be excluded from gross
      income under subsection (a)(5) shall not exceed - 
          (A) $100 per month in the case of the aggregate of the
        benefits described in subparagraphs (A) and (B) of paragraph
        (1),
          (B) $175 per month in the case of qualified parking, and
          (C) the applicable annual limitation in the case of any
        qualified bicycle commuting reimbursement.

      In the case of any month beginning on or after the date of the
      enactment of this sentence and before January 1, 2012,
      subparagraph (A) shall be applied as if the dollar amount therein
      were the same as the dollar amount in effect for such month under
      subparagraph (B).
      (3) Cash reimbursements
        For purposes of this subsection, the term "qualified
      transportation fringe" includes a cash reimbursement by an
      employer to an employee for a benefit described in paragraph (1).
      The preceding sentence shall apply to a cash reimbursement for
      any transit pass only if a voucher or similar item which may be
      exchanged only for a transit pass is not readily available for
      direct distribution by the employer to the employee.
      (4) No constructive receipt
        No amount shall be included in the gross income of an employee
      solely because the employee may choose between any qualified
      transportation fringe (other than a qualified bicycle commuting
      reimbursement) and compensation which would otherwise be
      includible in gross income of such employee.
      (5) Definitions
        For purposes of this subsection - 
        (A) Transit pass
          The term "transit pass" means any pass, token, farecard,
        voucher, or similar item entitling a person to transportation
        (or transportation at a reduced price) if such transportation
        is - 
            (i) on mass transit facilities (whether or not publicly
          owned), or
            (ii) provided by any person in the business of transporting
          persons for compensation or hire if such transportation is
          provided in a vehicle meeting the requirements of
          subparagraph (B)(i).
        (B) Commuter highway vehicle
          The term "commuter highway vehicle" means any highway vehicle
        - 
            (i) the seating capacity of which is at least 6 adults (not
          including the driver), and
            (ii) at least 80 percent of the mileage use of which can
          reasonably be expected to be - 
              (I) for purposes of transporting employees in connection
            with travel between their residences and their place of
            employment, and
              (II) on trips during which the number of employees
            transported for such purposes is at least  1/2  of the
            adult seating capacity of such vehicle (not including the
            driver).
        (C) Qualified parking
          The term "qualified parking" means parking provided to an
        employee on or near the business premises of the employer or on
        or near a location from which the employee commutes to work by
        transportation described in subparagraph (A), in a commuter
        highway vehicle, or by carpool. Such term shall not include any
        parking on or near property used by the employee for
        residential purposes.
        (D) Transportation provided by employer
          Transportation referred to in paragraph (1)(A) shall be
        considered to be provided by an employer if such transportation
        is furnished in a commuter highway vehicle operated by or for
        the employer.
        (E) Employee
          For purposes of this subsection, the term "employee" does not
        include an individual who is an employee within the meaning of
        section 401(c)(1).
        (F) Definitions related to bicycle commuting reimbursement
          (i) Qualified bicycle commuting reimbursement
            The term "qualified bicycle commuting reimbursement" means,
          with respect to any calendar year, any employer reimbursement
          during the 15-month period beginning with the first day of
          such calendar year for reasonable expenses incurred by the
          employee during such calendar year for the purchase of a
          bicycle and bicycle improvements, repair, and storage, if
          such bicycle is regularly used for travel between the
          employee's residence and place of employment.
          (ii) Applicable annual limitation
            The term "applicable annual limitation" means, with respect
          to any employee for any calendar year, the product of $20
          multiplied by the number of qualified bicycle commuting
          months during such year.
          (iii) Qualified bicycle commuting month
            The term "qualified bicycle commuting month" means, with
          respect to any employee, any month during which such employee
          - 
              (I) regularly uses the bicycle for a substantial portion
            of the travel between the employee's residence and place of
            employment, and
              (II) does not receive any benefit described in
            subparagraph (A), (B), or (C) of paragraph (1).
      (6) Inflation adjustment
        (A) In general
          In the case of any taxable year beginning in a calendar year
        after 1999, the dollar amounts contained in subparagraphs (A)
        and (B) of paragraph (2) shall be increased by an amount equal
        to - 
            (i) such dollar amount, multiplied by
            (ii) the cost-of-living adjustment determined under section
          1(f)(3) for the calendar year in which the taxable year
          begins, by substituting "calendar year 1998" for "calendar
          year 1992".

        In the case of any taxable year beginning in a calendar year
        after 2002, clause (ii) shall be applied by substituting
        "calendar year 2001" for "calendar year 1998" for purposes of
        adjusting the dollar amount contained in paragraph (2)(A).
        (B) Rounding
          If any increase determined under subparagraph (A) is not a
        multiple of $5, such increase shall be rounded to the next
        lowest multiple of $5.
      (7) Coordination with other provisions
        For purposes of this section, the terms "working condition
      fringe" and "de minimis fringe" shall not include any qualified
      transportation fringe (determined without regard to paragraph
      (2)).
    (g) Qualified moving expense reimbursement
      For purposes of this section, the term "qualified moving expense
    reimbursement" means any amount received (directly or indirectly)
    by an individual from an employer as a payment for (or a
    reimbursement of) expenses which would be deductible as moving
    expenses under section 217 if directly paid or incurred by the
    individual. Such term shall not include any payment for (or
    reimbursement of) an expense actually deducted by the individual in
    a prior taxable year.
    (h) Certain individuals treated as employees for purposes of
      subsections (a)(1) and (2)
      For purposes of paragraphs (1) and (2) of subsection (a) - 
      (1) Retired and disabled employees and surviving spouse of
        employee treated as employee
        With respect to a line of business of an employer, the term
      "employee" includes - 
          (A) any individual who was formerly employed by such employer
        in such line of business and who separated from service with
        such employer in such line of business by reason of retirement
        or disability, and
          (B) any widow or widower of any individual who died while
        employed by such employer in such line of business or while an
        employee within the meaning of subparagraph (A).
      (2) Spouse and dependent children
        (A) In general
          Any use by the spouse or a dependent child of the employee
        shall be treated as use by the employee.
        (B) Dependent child
          For purposes of subparagraph (A), the term "dependent child"
        means any child (as defined in section 152(f)(1)) of the
        employee - 
            (i) who is a dependent of the employee, or
            (ii) both of whose parents are deceased and who has not
          attained age 25.

        For purposes of the preceding sentence, any child to whom
        section 152(e) applies shall be treated as the dependent of
        both parents.
      (3) Special rule for parents in the case of air transportation
        Any use of air transportation by a parent of an employee
      (determined without regard to paragraph (1)(B)) shall be treated
      as use by the employee.
    (i) Reciprocal agreements
      For purposes of paragraph (1) of subsection (a), any service
    provided by an employer to an employee of another employer shall be
    treated as provided by the employer of such employee if - 
        (1) such service is provided pursuant to a written agreement
      between such employers, and
        (2) neither of such employers incurs any substantial additional
      costs (including foregone revenue) in providing such service or
      pursuant to such agreement.
    (j) Special rules
      (1) Exclusions under subsection (a)(1) and (2) apply to highly
        compensated employees only if no discrimination
        Paragraphs (1) and (2) of subsection (a) shall apply with
      respect to any fringe benefit described therein provided with
      respect to any highly compensated employee only if such fringe
      benefit is available on substantially the same terms to each
      member of a group of employees which is defined under a
      reasonable classification set up by the employer which does not
      discriminate in favor of highly compensated employees.
      (2) Special rule for leased sections of department stores
        (A) In general
          For purposes of paragraph (2) of subsection (a), in the case
        of a leased section of a department store - 
            (i) such section shall be treated as part of the line of
          business of the person operating the department store, and
            (ii) employees in the leased section shall be treated as
          employees of the person operating the department store.
        (B) Leased section of department store
          For purposes of subparagraph (A), a leased section of a
        department store is any part of a department store where over-
        the-counter sales of property are made under a lease or
        similar arrangement where it appears to the general public that
        individuals making such sales are employed by the person
        operating the department store.
      (3) Auto salesmen
        (A) In general
          For purposes of subsection (a)(3), qualified automobile
        demonstration use shall be treated as a working condition
        fringe.
        (B) Qualified automobile demonstration use
          For purposes of subparagraph (A), the term "qualified
        automobile demonstration use" means any use of an automobile by
        a full-time automobile salesman in the sales area in which the
        automobile dealer's sales office is located if - 
            (i) such use is provided primarily to facilitate the
          salesman's performance of services for the employer, and
            (ii) there are substantial restrictions on the personal use
          of such automobile by such salesman.
      (4) On-premises gyms and other athletic facilities
        (A) In general
          Gross income shall not include the value of any on-premises
        athletic facility provided by an employer to his employees.
        (B) On-premises athletic facility
          For purposes of this paragraph, the term "on-premises
        athletic facility" means any gym or other athletic facility - 
            (i) which is located on the premises of the employer,
            (ii) which is operated by the employer, and
            (iii) substantially all the use of which is by employees of
          the employer, their spouses, and their dependent children
          (within the meaning of subsection (h)).
      (5) Special rule for affiliates of airlines
        (A) In general
          If - 
            (i) a qualified affiliate is a member of an affiliated
          group another member of which operates an airline, and
            (ii) employees of the qualified affiliate who are directly
          engaged in providing airline-related services are entitled to
          no-additional-cost service with respect to air transportation
          provided by such other member,

        then, for purposes of applying paragraph (1) of subsection (a)
        to such no-additional-cost service provided to such employees,
        such qualified affiliate shall be treated as engaged in the
        same line of business as such other member.
        (B) Qualified affiliate
          For purposes of this paragraph, the term "qualified
        affiliate" means any corporation which is predominantly engaged
        in airline-related services.
        (C) Airline-related services
          For purposes of this paragraph, the term "airline-related
        services" means any of the following services provided in
        connection with air transportation:
            (i) Catering.
            (ii) Baggage handling.
            (iii) Ticketing and reservations.
            (iv) Flight planning and weather analysis.
            (v) Restaurants and gift shops located at an airport.
            (vi) Such other similar services provided to the airline as
          the Secretary may prescribe.
        (D) Affiliated group
          For purposes of this paragraph, the term "affiliated group"
        has the meaning given such term by section 1504(a).
      (6) Highly compensated employee
        For purposes of this section, the term "highly compensated
      employee" has the meaning given such term by section 414(q).
      (7) Air cargo
        For purposes of subsection (b), the transportation of cargo by
      air and the transportation of passengers by air shall be treated
      as the same service.
      (8) Application of section to otherwise taxable educational or
        training benefits
        Amounts paid or expenses incurred by the employer for education
      or training provided to the employee which are not excludable
      from gross income under section 127 shall be excluded from gross
      income under this section if (and only if) such amounts or
      expenses are a working condition fringe.
    (k) Customers not to include employees
      For purposes of this section (other than subsection (c)(2)), the
    term "customers" shall only include customers who are not
    employees.
    (l) Section not to apply to fringe benefits expressly provided for
      elsewhere
      This section (other than subsections (e) and (g)) shall not apply
    to any fringe benefits of a type the tax treatment of which is
    expressly provided for in any other section of this chapter.
    (m) Qualified retirement planning services
      (1) In general
        For purposes of this section, the term "qualified retirement
      planning services" means any retirement planning advice or
      information provided to an employee and his spouse by an employer
      maintaining a qualified employer plan.
      (2) Nondiscrimination rule
        Subsection (a)(7) shall apply in the case of highly compensated
      employees only if such services are available on substantially
      the same terms to each member of the group of employees normally
      provided education and information regarding the employer's
      qualified employer plan.
      (3) Qualified employer plan
        For purposes of this subsection, the term "qualified employer
      plan" means a plan, contract, pension, or account described in
      section 219(g)(5).
    (n) Qualified military base realignment and closure fringe
      For purposes of this section - 
      (1) In general
        The term "qualified military base realignment and closure
      fringe" means 1 or more payments under the authority of section
      1013 of the Demonstration Cities and Metropolitan Development Act
      of 1966 (42 U.S.C. 3374) (as in effect on the date of the
      enactment of the American Recovery and Reinvestment Tax Act of
      2009).
      (2) Limitation
        With respect to any property, such term shall not include any
      payment referred to in paragraph (1) to the extent that the sum
      of all of such payments related to such property exceeds the
      maximum amount described in subsection (c) of such section (as in
      effect on such date).
    (o) Regulations
      The Secretary shall prescribe such regulations as may be
    necessary or appropriate to carry out the purposes of this section.