Kansas Department of Administration

00-P-018 Employee Taxability of State-Owned Vehicles (Supersedes Informational Circular 99-P-023)

DATE: January 12, 2000
SUBJECT: Employee Taxability of State-Owned Vehicles
EFFECTIVE DATE: Immediately
CONTACT: Roger Basinger (785) 296-7058 (roger.basinger@da.state.ks.us)
APPROVAL: approved by Shirley Moses
SUMMARY: IRS Changes to Cents-Per-Mile Valuation Rule for Calendar Year 2000

The Internal Revenue Service (IRS) has increased the mileage rate to 32.5 cents under the Cents-Per-Mile method of valuing an employees personal (commuting) use of a state-owned vehicle. The new rate became effective January 1, 2000. The Cents-Per-Mile valuation is one of several methodologies that can be used to calculate fringe benefit income. Using this methodology, fringe benefit income is calculated by multiplying the 32.5 cents rate by the number of personal (commuting) miles driven by the employee in the state-owned vehicle. To be eligible to use the Cents-Per-Mile method, the employee cannot be a control employee (i.e. an elected official, an appointed official whose appointment requires the approval of the Legislature, or similar level officers or employees (department and agency heads). In addition, the fair market value of the vehicle used by the employee cannot exceed $15,400.00 if the vehicle was first made available to the employee for personal (commuting) use in calendar year 2000. Agencies and employees are also reminded that the only personal use of a state vehicle allowed under state law is to commute between the employee's work station and home, and then in only limited situations.

The purpose of this circular is to report the change in mileage rate for the Cent-Per-Mile method of valuing fringe benefit income. A revised circular regarding the "Employee Taxability for the Value of Certain Uses of a State-Owned Vehicle" will be issued in April 2000 and will discuss the entire issue in depth.

SAM:rdb 

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