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PHIT Act Falls Victim to a D.C. in Disarray

9 Jan, 2019

By: Mary Helen Sprecher
More than a Decade in the Making, Legislation Fails to Pass, Caught in Administration’s Shutdown

The government shutdown has claimed its first major casualty – and it’s something that has nothing to do with federal workers and their paychecks – and everything to do with sports.

The Personal Health Investment Today (PHIT) Act, which would have changed the IRS definition of a “medical expense” to include physical activity as a form of prevention – and thus made it possible for individuals to deduct expenses like enrollment in sports programs, including fees for registration in 5Ks, Senior Games, tournaments and leagues – was not passed.

PHIT was awaiting a final vote in the U.S. Senate, but fell victim to the dysfunction in D.C., despite passing the House with strong bipartisan support in July.

“We got caught in the shutdown politics,” said SFIA President & CEO, Tom Cove. “We had the PHIT Act perfectly positioned to be included in the end-of-year tax package, with many legislators having a strong, vested interest in passing this bill, but it simply never came up for a vote. I can say, with 100 percent assurance, had the PHIT Act been voted on, it would have been passed and signed by the President.”

Expanding the medical expense definition would have made physical activity expenses reimbursable using pre-tax dollars in Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) and would have allowed consumers to deduct physical activity costs once they met the 10 percent of income threshold on medical expenses.

The combined efforts of the sports and fitness community kept the PHIT act in the forefront of the Senate’s awareness. Ultimately, however, Congress could not agree on an end-of-year tax bill, which effectively killed PHIT’s chances to pass, as there was no longer a legislative vehicle that could carry the PHIT Act.

Despite the fact that the current administration lacks a champion of exercise, sports or even outright physical health, there remains deep-rooted support for the PHIT Act in Congress, even with a divided House and Senate beginning this month.

The measure was originally introduced in 2006 (!), but SFIA’s public information officer Bill Sells over the summer described PHIT’s progress through the years as continuing to get stuck “in repeal and replace purgatory. We kept building support to keep it bipartisan.”

According to SFIA, The Democratic House and Republican Senate will need to find common ground to move legislation through both chambers. Fortunately, PHIT has always garnered strong bipartisan support. The PHIT Act will be re-introduced in the House and Senate again this year, and SFIA has announced that it intends to work with its partners to pass PHIT into law. Throughout the past four Congresses, support of PHIT has grown from 25 cosponsors to over 150 cosponsors.

“The unpredictability essentially doomed the PHIT Act in the end,” said Cove. “We’ve been working to pass PHIT for 10 years. We were right on the goal line of passage and had an incredible amount of bipartisan support for this concept and legislation. Unfortunately, the shutdown politics sucked all of the air out of the room and nothing got done. It’s a shame. However, we’ll be back in 2019, fully prepared to rally the industry and further grow the support of the PHIT Act into passage.”

Full background and information on the PHIT Act is available through SFIA.

SDM will continue to follow this developing issue which, if passed into law, could provide an enormous benefit to event owners.

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