Mileage reimbursement could hit all-time high in 2008
The IRS announced Tuesday that beginning on Jan. 1, 2008, the standard rate used to calculate the deductible costs of operating an automobile for business purposes will be increased to 50.5 cents per mile, the highest rate ever. The current rate, set at the beginning of 2007, is 48.5 cents per mile.
The General Services Administration is permitted under federal law to establish a reimbursement rate for federal employees who use personal vehicles for business, but it cannot exceed the one established by the IRS. In the past, GSA has consistently followed the IRS's lead.
GSA also is required to conduct yearly studies on the costs associated with travel and operation of privately owned vehicles. The agency is supposed to consult with the Transportation and Defense departments and federal employee organizations in determining the reimbursement rate.
The IRS mileage rate is based on an annual study of the fixed and variable costs of operating an automobile, including gas prices, oil, tires and scheduled maintenance, according to the agency. The study was conducted by Runzheimer International, an independent contractor based in Rochester, Wis.
In June, the National Treasury Employees Union called for a mid-year rate increase, noting that high gas prices were placing "an especially high burden on those who must drive to perform their work, including employees of the IRS and other agencies of the federal government."
NTEU President Colleen Kelley said Wednesday that she plans to send a letter to GSA Administrator Lurita Alexis Doan asking for immediate action in extending the higher mileage reimbursement rate to federal employees. "I will ask GSA to act before Jan. 1, so federal employees can benefit from this higher rate at the beginning of the new year," Kelley said.
According to federal travel regulations, employees may use personal vehicles for official travel if they obtain permission from their agency. The reimbursement rates apply only to authorized means of travel.
The mileage reimbursement does not pertain to employee transfers or relocations. Those are designated as a transportation expenses, rather than allowances for the cost and operation of a vehicle, according to GSA.