New Mileage Regulations

MILEAGE REGULATIONS FREQUENTLY ASKED QUESTIONS Updated February 16, 2005

The following are meant to supplement the list of "qualifications" regarding the use of a State Vehicle vs. Personal Vehicle in the Business Procedures Manual, Travel Section, posted at the Controller’s Office Web Page at http://www.montana.edu/wwwbu/.

Q1. I will travel by airplane to a business conference, am I to take a state vehicle just to leave it parked at the airport?

The State travel policy provides an exception for short trips, of less than 25 miles per day. Your personal vehicle may be used at the current year’s mileage rate, high, or a taxi may also be used.

Q2. We have employees in satellite and remote locations throughout the state, how does this affect them?

A Motor Pool vehicle can be considered "unavailable" to these employees and they can sign the acknowledgement as such on the Travel Expense Voucher.

Q3. We have employees that run errands around town, or short trips to towns close to Bozeman, what about this situation?

The State travel policy provides an exception for short trips, of less than 25 miles per day. Employees traveling less than 25 miles per day may be reimbursed at the current year’s high mileage rate.

Q4. What if my employee is traveling to a small town, and the only restaurant there is also a bar? How would it look to have a state car there?

The Vehicle Use regulations of the state of Montana allow employees to obtain food and lodging while on the road for business travel. Eating at a bar is not prohibited but consuming alcohol is prohibited. Employees should be aware that citizens may make assumptions about a state car parked at a bar and make a complaint. However, if a motor pool vehicle is available, the risk of such an assumption on the part of the public would not justify use of a personal vehicle at the current year’s high mileage rate.

Q5. I need a type of vehicle that the motor pool does not have, or I am traveling in January and the Motor Pool has no vehicles with winter safety equipment I would prefer.

If the Motor Pool doesn't have the type of vehicle you need, then the state vehicle would be considered "unavailable."

Q6. How does this new policy work with regard to the University's arrangements with Enterprise RAC or Thrifty Car Rental?

The policy does not affect the use of rental cars at all. In many cases, using a car from a rental agency is an economic alternative for your department to consider. It is, however, not acceptable to use a commercial rental car and charge the state for use of a personal vehicle. The state will pay only the charge for the rental car.

Q7. When my MSU business is finished, I am going on annual leave (with or without my spouse). What car should I take and what mileage may I claim?

The state Vehicle Use rules prohibit the personal use of state motor pool cars and prohibit the transportation of persons not engaged in state business in a state car. Therefore, you cannot use a state motor pool car for personal business except for food, lodging or emergency purposes, to obtain items needed while in a travel status or, if traveling overnight, to drive to a cultural, recreational or leisure activity or to attend to personal business if within 30 miles of the employee's lodging.

In any situation in which a decision is made to take a personal car because of your personal use, you will be reimbursed at the current years low mileage rate. If, however, there is not a motor pool car available and therefore you take a personal car, you are entitled to be reimbursed at the current year’s high mileage rate cents per mile rate and you may use your own car for your personal use on that trip.

Q8. Often times within one month I will take both day trips and overnight trips; when I receive my reimbursement, is there going to be a way for me to see which costs are being taxed? I want to make certain that only the daytrips are taxed.

Answer: The Travel Expense Voucher has been modified with an additional meal column (which can be found on the Controller’s website). There are now two meal columns; one to reflect the taxable meal per diems and one for the non-taxable meal per diems. The taxable meal per diems will be identified and paid using the account code 62407for in state and 62417for out of state. Non-taxable meal per diems will be identified and paid using the account codes 62405 (in-state travel other), 62410 (in-state meals overnight) or 62415 (out of state travel).

Any meals that are taxable during the month, which you were reimbursed for through a BPA, will be reported to Payroll by the Controller’s Office and identified on your payroll check stub as “Same Day Per Diem”. Remember to include your same day meals on your Travel Expense Voucher.

Q9. What backup documentation is needed to show that the meal does not have to be taxed?

Answer: The deciding factor between taxable and non-taxable is the ‘business’ nature of the meal as opposed to a ‘personal’ meal. Documentation, in the form of a separate memo or in the note section at the bottom of the travel expense voucher, should clearly state the business nature of the meal, the topic discussed and who was at the meeting.

Exp 1: Mary is in Billings for the day to attend a conference, and goes out for lunch. Lunch is taxable, (use account 62407). The conference is over at 5:00 p.m. and she plans a ‘dinner meeting’ with the other university purchasing personnel. This meal is not taxed because business is being conducted and it is reasonable to extend the workday through the dinner hour when meeting with folks from out of town. Use account 62405 and document the business nature of the meal, topic discussed, and who you met with to claim your own per diem for the meal.

If you paid for a group meal, be sure to get an itemized receipt and make sure a pre- approved Hospitality Approval Form is completed if the meal is over $30.00

If she eats in the car on the way home it is taxed.

Exp 2: Jen goes to Helena to host a pizza party for prospective students and their families. She leaves Bozeman at 3:00 p.m. to get there in time for the pizza party that starts at 5:00 p.m. The pizza party lasts until 7:00 p.m. Jen, as the host of the function, is busy speaking with students/families and is not able to eat at the function. Therefore, she grabs something to eat before coming back to Bozeman at 7:30 p.m.

Are her meal expenses taxed since she had to work through dinner? Answer: Yes, unless she ate dinner with the recruits.

If so, what is the tax rate? Answer: Based on employee’s tax bracket.

Exp 3: I travel to visit field sites. The business purpose of the day is to visit the site and collect data. Would my meals be taxable?

Answer: If your visit does not require overnight stays, the meals are taxable.

Exp 4: I travel to Wyoming and return the same day. Would my meals be taxable? Answer: The IRS does not make a distinction between in-state and out-of-state same day travel. Therefore, your meals would be taxable, unless they meet the criteria for business meeting’s and are documented as such. The account code that should be used for out-of- state same day meals is 62417.

In any of the cases listed above, and in any others where the supervisor has sufficient justification that the use of a motor pool car is not in the best interest of the state, the supervisor should document the reason and write the statement "not in the State's best interest," or "required vehicle unavailable" in the travel justification area at the bottom of the travel reimbursement form.

Please remember, that if the traveler is requesting reimbursement of mileage at current high mileage rate, the traveler MUST sign the acknowledgement or the rate will be changed to the current low mileage rate.

As always, please call the Travel Desk (5531) with any questions. Thank you.