Vehicle Policy update

As is my wont, I was surfing the State webs when I came across this gem.
From the Massachusetts Department of Revenue.

Employer Provided Vehicle

Employers who provide their employees with cars (or other highway motor vehicles) must determine the actual value of the employees’ personal use of the cars. The value for personal use is considered a non-cash fringe benefit that must be included in the employees’ gross income.

An employer must determine the actual value of this fringe benefit to include in employees’ income.

The value may be determined by either of the following methods:
The actual value of the personal use of the car; or
The actual value of the car as if the employees used it entirely for personal purposes (100% income inclusion).
If an employer includes 100% of the value in employees’ gross income, employees may deduct the value of the business use of the car that is computed on U.S. Form 2106.

If a company vehicle is considered to be of limited personal value, determined by the IRS, such as an ambulance, hearse, school bus, police or fire vehicles, the personal use would not be subject to tax

So the question becomes, on top of any other questions about these policies, how is the City keeping track of the business use and personal use of City vehicles?
Is this value being reflected in the employees paycheck as a Fringe Benefit Cost?

The response from the City will, no doubt, be that no personal use exists.
Then I should not see the Mayor getting his breakfast and or morning coffee while driving a City owned vehicle. Isn’t driving to and from work a personal use?

admin posted at 2010-1-23 Category: Uncategorized

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