MEMORANDUM NO. 98-4
January 30, 1998
TO THE HEADS OF ALL STATE AGENCIES
|ATTENTION:||Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers|
|SUBJECT:||Calculation of the Taxable Benefit of the Non-Business Use of State-Provided Vehicles, Calendar Year 1998|
This memorandum is being issued to:
Personal commutation to work is valued at a daily commuting rate of $1.50 for each one-way trip or ($3.00 round trip).
NOTE: Special rules may apply when using each of these methods. Once one of the valuation methods is elected, the employee must use it for all subsequent years unless the qualification rules are not met.
Control employees can choose only the lease value or the cents-per-mile methods for calculation of the taxable benefit. All other employees must use the commuting value method.
A control employee is defined as:
The employee commuted round trips to work for 60 days during the reporting quarter. The rate of $3.00/day is multiplied by 60 days = $180.00.
Example 2: Control employee using lease value or cents-per-mile
The employee has been assigned a state vehicle for the first time. She commutes to work 20 miles round trip for 60 days in the quarterly reporting period. She may choose one method of valuing the use of the vehicle. A comparison of the methods follows:
|$193/month for 3 months||= $ 579.00|
|20 miles/day at 5.5 cents/mile multiplied by 60 days||= $ 66.00|
|TOTAL QUARTERLY AMOUNT||$ 645.00|
|20 miles/day at 32.5 cents/mile by 60 days|
|TOTAL QUARTERLY AMOUNT||$ 390.00|
In this example the cents-per-mile method is the least costly. However, once a method is selected, the employee must continue with that method regardless of his/her changes in circumstances.
Net out any amount that has been paid to the state as reimbursement for personal use (if the amount paid the state exceeds the taxable benefit for the tax year, the benefit equals zero. Credit amounts can not be carried forward).
In example 1 above, the employee does not reimburse the state for the commuting use of the vehicle; therefore, a value of $180.00 will be added to the employee's reported wages.
In example 2 above, if the employee reimbursed the state for Home-to-Office travel, at a rate of 2.50 per day for 60 days which equals $150.00, the net reportable benefit is $240.00 ($390.00 - 150.00).
The Commissioner of the Department of Administrative Services (DAS) issues a memorandum concerning the rates for the reimbursement of Home-to-Office travel. Not all employees are required to reimburse the state. Questions concerning State reimbursement should be addressed to DAS.
Submit the required paperwork to his/her business office for inclusion in a payroll transaction.
Special forms are available to facilitate this process. Certain categories of vehicle use are exempt from taxation. Please refer to Comptroller's Memoranda Nos. 86-13 and 89-55 or the Comptroller's Policy Manual, Section VIII, Taxation of Vehicles, for details.
Agencies must continue to maintain the records necessary to properly determine and report on the dollar value of the vehicle use benefit for the period November 1, 1997 through October 31, 1998.
Questions may be directed to the Office of the State Comptroller as follows:
Computation and Benefits: Policy Services Division, 860-702-3440;
Payroll Procedures: Payroll Services Division, 860-702-3463;
Reimbursement Requirements: DAS, Director of State Fleet Operations, 566-5940.
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