The IRS has announced a new mileage rate effective January 1, 2009. The rate will decrease slightly, to 55 cents per mile.
“The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago,” said the IRS in a press release, “but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.”
The IRS notes that the business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half.
Employers must generally reimburse employees for business-related travel expenses, including mileage. Often the IRS rate is adopted as the standard reimbursement rate, although this is by no means the exclusive method. Last year, for example, the California Supreme Court ruled that it is permissible in some circumstances to reimburse expenses by means of enhanced compensation. (Gattuso v. Harte-Hanks Shopper, Inc.)
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC