Use of Courtesy Vehicles and Vehicle UPPS No. 03.01.12
Allowances Provided by the
University Issue
No. 3
Effective Date: 02/29/2008
Review: April 1 E6Y
01. POLICY STATEMENTS
01.01 The purpose of this UPPS is to establish policy
and procedure for reporting the personal use of courtesy vehicles and for
reimbursement of business mileage related to courtesy vehicles. This policy is
also intended to cover reimbursement of excess business mileage related to
vehicle allowances provided to certain authorized staff. The intention of this
policy is to be in compliance with Internal Revenue Service (IRS) requirements,
the State of Texas Travel Regulations Act and Texas State University System
Regent’s Rules and Regulations Series 20801 pertaining to travel allowances.
01.02 Personal use of courtesy vehicles is
reportable as taxable income to the employee on the employee’s annual W-2
statement. The University will calculate taxable amounts using the prorated
Annual Lease Value as defined by the IRS and will apply the ratio of personal
miles to total miles driven in a determinable period. The applicable IRS
reference follows:
“For employer-provided vehicles available to employees for
personal use for an entire year, generally the value of the personal use may be
determined under the automobile lease valuation rule of section 1.61-21(d) of
the regulations. Under this valuation rule, the value of the personal use is
the Annual Lease Value.”
01.03 Courtesy Vehicle Business Mileage: Authorized
employees who use a courtesy vehicle can be reimbursed for official business
travel at a rate not to exceed 50% of the standard mileage rate authorized as
published by the IRS.
01.04 Mileage
Reimbursement in addition to Vehicle Allowance: Employees who receive a vehicle
allowance can only be reimbursed for “excess business mileage.” Excess business
mileage is defined as business travel outside
of the San Marcos area. The San Marcos area includes a 50 mile radius of San
Marcos but does not include the Greater Austin area or the Greater San Antonio
area. The reimbursement for excess business mileage is only reimbursed at 50%
of the federal mileage rate as published by the State Comptroller’s Office.
01.05 This UPPS does not apply to the use and operation
of Texas State University – San Marcos official police vehicles.
01.06 This policy applies to all university
vehicles, including those owned or leased by the University as well as courtesy
vehicles provided to certain authorized staff by local car dealerships.
01.07 The IRS may assess penalties and interest
against employees who fail to comply with this policy. In addition, the
University may discipline employees who do not comply with this policy.
01.08 If other university-related groups wish to supply
vehicles to university employees, the group must send written documentation of
the arrangement to the University’s Tax Specialist, located in the General
Accounting Office, who will review and approve for compliance with this policy.
01.09 The
reporting year for courtesy car reports begins November 1st and ends
October 31st. Personal usage is reported monthly or quarterly,
depending on arrangements made by the department with the Tax Specialist. For
employees who report on a quarterly basis, the reporting quarters and
corresponding paycheck dates are:
|
Reporting
Quarters: November 1
-January 31 February 1
- April 30 May 1 -
July 31 August 1 -
October 31 |
Paycheck affected:
March 1
paycheck June 1
paycheck September 1
paycheck December 1
paycheck |
02. DEFINITIONS
02.01Courtesy vehicle: Any
vehicle provided to an employee by the University for university business
reasons without regard to ownership. The
University, one of its affiliated organizations (e. g., a foundation), or a car
dealership may hold the actual title to employer-provided vehicles. This
definition also includes any vehicles provided directly to university employees
by a car dealership. This definition includes all vehicles whether owned,
leased or received as a gift. Fuel expenses are reimbursed for official
business travel by employees who are authorized to use a courtesy vehicle. All
personal use of the courtesy vehicle is documented and included as taxable
income to the employee.
02.02Personal use of a courtesy
vehicle includes commuting from home to work and any other travel which is not
official business travel. Personal usage of a courtesy vehicle must be reported
on a Courtesy Car Declaration Form and is reported to the Payroll Office as
taxable income. Forms are located on the General Accounting Office/Tax
Specialist webpage under Resources & Forms (http://www.txstate.edu/gao/taxspec/forms).
02.03A vehicle allowance is an
authorized additional payroll amount for certain designated officials to be
used to cover all vehicle expenses including fuel for travel within the Greater
San Marcos area. All official business travel within the Greater San Marcos
area is considered to be a part of the vehicle allowance. See Section 01.04 for
a definition of the Greater San Marcos Area. Only “excess business mileage” is
reimbursed to employees who receive a vehicle allowance.
02.04Official business travel
includes travel to perform employment-related duties, such as transporting
official recruits or prospective employees.
The business purpose must be clearly defined on the travel voucher. Under no circumstances will commuting mileage
from home to work be reimbursed.
02.05 An arm's length transaction means a
transaction in which neither the buyer nor seller is under any compulsion to
buy or sell, and both are acting based on reasonable knowledge of the facts
involved.
02.06 Designated department personnel refers to the
employees in each department designated by the appropriate vice president that
have the responsibility to report courtesy vehicle changes and personal use to
the Tax Specialist or to the Payroll Office as written in this UPPS.
03. RESPONSIBILITIES OF ACCOUNT MANAGER, EMPLOYEE, AND DESIGNATED
DEPARTMENT PERSONNEL
03.01 Designated department personnel must notify
the Tax Specialist when a courtesy vehicle or vehicle allowance is provided to
a new or existing employee. Documentation provided to the Tax Specialist must
include the following:
a.
The employee’s name and Texas State identification number, or HR
Master File Person ID,
b. the employee’s job title
and department,
c. the name and contact
information of the account manager and designated department personnel,
d. For courtesy vehicles, the
VIN, make, model, and year of the vehicle,
e. the beginning odometer
reading,
f. documentation of the
invoice price, manufacturer's retail price or Blue Book value (if used
vehicle),
g. For vehicle allowance, the
amount of the vehicle allowance and the purpose intended for the vehicle
allowance, and
h. For both courtesy vehicles
and vehicle allowance, the date the employee will begin using the courtesy
vehicle or vehicle allowance.
03.02 Courtesy vehicle drivers are required to notify
designated department personnel immediately when a new courtesy vehicle is
obtained from the dealership. Documentation provided by courtesy vehicle
drivers to designated department personnel must include the following:
a.
The new vehicle VIN,
b. the make, model and year,
c. the invoice price,
manufacturer's retail price, or the Blue Book value if a used vehicle,
d. the beginning odometer
reading,
e. the date the vehicle is
received for use by the courtesy vehicle driver, and
f. the date the previous
vehicle was returned by the courtesy vehicle driver to the dealer (if
applicable).
03.03 Designated department personnel must report
any courtesy vehicle change of information to the Environmental Health, Safety,
and Risk Management office immediately so vehicles can be added or information
can be updated on the University’s insurance policy. Failure to report this
information can result in a lapse of liability insurance coverage on the
vehicle.
03.04 Complete Mileage Log
Each employee who is assigned a vehicle must document all business
and total miles driven. The documentation must include the date and business
mileage of each business trip. All business mileage must be supported by
written records (logs, calendars or other means) reflecting the date, place and
nature of business.
The employee is
responsible for retaining copies of all written records to be presented upon
demand in the event of internal or external audits. These records are to be
maintained for 5 years from the year in which the personal mileage was reported
on the employee’s W-2.
03.05 Completing and Submitting the Courtesy Car
Declaration Form
a.
At the end of business on the last day of the reporting period,
the employee must complete the Courtesy Car Declaration Form for all
university-provided vehicles used during the previous reporting period. This
form will serve as written substantiation of business and personal use. At the
end of each reporting period, document the total mileage driven during the
reporting period and the odometer reading at the end of the reporting period.
The business mileage will be subtracted from the total mileage to get the
personal mileage. Forms are located on the General Accounting Office/Tax
Specialist webpage under Resources & Forms (http://www.txstate.edu/gao/taxspec/forms).
b.
The Athletics Business Office should forward the completed form to
the Payroll Office and a copy to the Tax Specialist by the 10th day
of the month following the end of the reporting period.
c.
Reporting periods and due dates are as follows for either monthly
or quarterly reporting:
1) Quarterly Reporting:
November 1 – January 31 is due February 10; February 1 – April 30 is due May 10;
May 1 – July 31 is due August 10; August 1 – October 31 is due November 10.
2) Monthly Reporting –
reports are due no later than the 10th of each month for the prior
month’s usage.
03.06 If an employee fails to file the Courtesy Car Declaration Form by the due
date, the estimate of personal versus business usage will be determined as
being 50% business use and 50% personal use. If an employee fails to
file more than two Courtesy Car Declaration Forms in any calendar year on the
third violation the designated department personnel will estimate 100% of the
vehicle use as personal use. After being reported in a period, estimated
mileage will not be revised.
03.07 Travel vouchers must be used to claim
reimbursement for official business mileage. All business mileage must be
supported by written records reflecting the date, place and nature of business.
If fuel receipts are used, reimbursement will not exceed 50% of the standard
mileage rate. The account manager has the discretion to determine whether a
traveler will be reimbursed using actual fuel receipts or 50% of the standard
mileage rate.
03.08 To determine mileage amounts, the employee must
use the State of Texas Comptroller’s Mileage Guide on the University’s General
Accounting Office/Accounts Payable/Travel webpage
(http://www.txstate.edu/gao/ap/travel/links.html).
If the mileage is less than the distance listed in
the mileage guide, the employee may only claim the actual miles traveled.
Alternatively, odometer readings may be used to determine
mileage amounts in the following three cases:
a.
If the mileage is not listed in the Guide, or
b.
If the employee is traveling to a particular location within a
city and the employee wants to track actual miles, or
c.
In-city mileage.
Odometer readings must be tracked on a mileage log and must be
listed point-to-point with a descriptive or physical address. Descriptive address
must be listed as the school visited, direction and number of miles from the
closest intersection, or city if necessary. Point-to-point means a building,
house, highway intersection or other localized spot. Address only must be
listed once on the mileage log for the duty point. Forms are located on the
General Accounting Office/Tax Specialist webpage under Resources & Forms (http://www.txstate.edu/gao/taxspec/forms).
Mapquest or other on-line mileage websites will not be
accepted in lieu of odometer readings.
If the account manager elects to reimburse actual fuel
receipts, mileage documentation is still required to justify amount of fuel
reimbursement.
03.09 Record keeping for Texas State owned or leased
automobiles and justification of expenses or mileage reimbursements related to
vehicle allowances or courtesy vehicles is the responsibility of the employee.
03.10 Maintaining Vehicle List and Valuation
New acquisition of a courtesy vehicle and any subsequent changes
to courtesy vehicles must be reported to the designated department
personnel. At the beginning of each
reporting period, designated department personnel will request from Environmental
Health, Safety, and Risk Management a current list of courtesy vehicles on
file. This list should be used to determine Fair Market Value each reporting
period.
a.
The University will use the safe-harbor valuation rule as the Fair
Market Value. For an employer-provided vehicle, this is the purchasing cost
(including sales tax, title and other purchase expenses) if made at arm's
length. For a leased vehicle or dealer-provided vehicle, this is (1) the
manufacturer's suggested retail price of the auto less eight percent (including
sales tax, title and other purchase expenses); (2) the retail value as reported
by a nationally recognized pricing source (i. e., Blue Book) that regularly
reports new or used vehicle retail values; or (3) the manufacturer's invoice
price (including any options) plus four percent.
b.
The Fair Market Value will be used to determine the prorated
annual lease value from the Annual Lease Value table provided by the IRS in
Publication 15-B. For consistency in
reporting, designated department personnel will use the Fair Market Value of
the vehicle possessed on the first day of the reporting period for the entire
period, regardless of when a courtesy vehicle change took place during the
reporting period.
03.11 Designated department personnel will use the
current list of vehicles provided by Environmental Health, Safety, and Risk
Management to calculate the federal income taxes owed on the value of the
personal use of the vehicle. The value is calculated using the prorated annual
lease value amount multiplied by the ratio of personal mileage to total
mileage. This information will be sent
to the
03.12 If the employee expends university-paid
gasoline for personal use, the designated department personnel will determine
the value to be added to the employee’s taxable income. The value of the
gasoline expended for personal use will be determined using the same ratio
calculated in a. above. The value of personal use is subject to federal
withholding, social security and medicare tax.
03.13 The following conditions must be met if other
department staff members (other than primary listed driver) use courtesy
vehicles on file with the University:
a.
The department staff member must be on the University’s approved
drivers list before driving a courtesy vehicle. See UPPS No.
05.05.02 for additional clarification on this process.
b.
The dealer that owns or leases the designated courtesy vehicle
must approve of the department staff member (other than the primary driver)
driving the designated courtesy vehicle.
c.
If items a. and b. are met, the other department staff member may
use the designated courtesy vehicle for business purposes only.
Any violations to this policy may result in removal of courtesy
vehicle privileges for the courtesy vehicle driver and the University.
04.
PAYROLL OFFICE RESPONSIBILITIES
04.01Payroll Taxes
a.
Upon receiving the Courtesy Car Declaration Form from the
designated department personnel, the
b.
The paycheck following the end of the period as outlined in
Section 01.09 will reflect applicable taxes.
04.02 Annual W-2 Tax Statement – Boxes 1, 3, and 5
of employees W-2 tax statements will reflect income related to this UPPS.
04.03 Personal tax implications – The University is
not allowed to give personal tax advice to employees. Employees should consult
with their personal tax advisor regarding the reporting requirements on their
personal tax return.
05. REVIEWERS OF THIS UPPS
05.01 Reviewers of this UPPS include the following:
Position Date
Director General
Accounting April 1 E6Y
Associate Vice President for April 1 E6Y
Financial Services
Tax Specialist April
1 E6Y
Director of Payroll April 1
E6Y
06. CERTIFICATION STATEMENT
This UPPS has been approved by the following individuals in their
official capacities and represents Texas State policy and procedure from the
date of this document until superseded
Tax Specialist; acting senior reviewer of this UPPS
Associate
Vice President for Financial Services
Vice President for Finance and Support Services
President