La. Admin. Code tit. 4 § V-4115

Current through Register Vol. 50, No. 8, August 20, 2024

Section V-4115 - Evaluation Tests for Exclusion from Taxable Compensation

A. The general rules of evaluation to be used in determining if and when a fringe benefit is exempt from inclusion as taxable compensation are as follows.

1. Meals

a. The value of meals furnished to an employee by and on behalf of the state will be excludable from the employee's gross compensation if two tests are met:

i. the meals are furnished on the premises of the employer; and

ii. the meals are furnished for the convenience of the employer.

b. Meals furnished by the state without charge will be considered furnished for the convenience of the employer if the meals are furnished for substantial noncompensatory business reasons of the state rather than as a means of providing additional compensation to the employee.

c. On the premises will be interpreted to mean either:

i. quarters that constitute an integral part of the business property; or

ii. premises on which the entity carries on some of its business activities.

2. Lodging

a. The value of lodging furnished to an employee by or on behalf of the state will be excluded from the employee's gross income, if three tests are met:

i. the lodging is furnished on the business premises of the employer;

ii. the lodging is furnished for the convenience of the employer; and

iii. the employee is required to accept such lodging as a condition of his employment. The third requirement means that the employee must be required to accept the lodging on the business premises in order to enable him to properly perform the duties of his employment, which in turn will mean that the lodging is furnished because the employee is required to be available for duty at all times or because the employee could not perform the services required of him unless he was furnished such lodging.

b. On the business premises will be interpreted to mean either:

i. living quarters that constitute an integral part of the business property; or

ii. premises on which the entity carries on some of its business activities.

c. Ownership or control by the state of the premises furnished is not a test criteria.

d. Lodging includes utilities and associated related items such as lawn maintenance, maid service, etc. The value of utilities, etc., furnished to the employee for the convenience of the state is excludable, unless the employee contracts directly with the utility, etc., for the service.

3. Transportation

a. The value of personal use of a state vehicle must be included as taxable compensation.

b. The value for use of a state vehicle for commuting purposes shall be a flat $1.50 per one way commute trip ($3 per day for round trip) if the following conditions are met:

i. the vehicle is owned or leased by the state and is provided for and used for state business;

ii. for bona fide noncompensatory business reasons the state requires the employee to commute to and from work in the vehicle;

iii. the department, agency, etc., has a written policy which disallows personal use of the vehicle by the employee, or any individual whose use would be taxable to the employee, except for de minimus personal use such as a lunch stop between business meetings;

iv. neither the employee nor any individual whose use would be taxable to the employee uses the vehicle for any personal purpose other than commuting and de minimus personal use; and

v. the employee using the vehicle is not a control employee as defined in Temporary Regulation Section 1. 61-2T(f)(5),(6).

c. For valuation of personal use of a vehicle for those employees who use a state vehicle to commute, but do not meet the conditions enumerated above, and those employees who have personal use of other modes of transportation, alternative valuation methods are available in the Internal Revenue Code and Regulations.

d. the alternative valuation methods, including the cents-per-mile rule or lease valuation method, may be utilized only upon prior approval of the Commissioner of Administration.

La. Admin. Code tit. 4, § V-4115

Promulgated by Office of the Governor, Division of Administration, LR 15:529 (July 1989), repromulgated LR 20:375 (April 1994), amended LR 25:1406 (August 1999).

AUTHORITY NOTE: Promulgated in accordance with R.S. 39:78 and Executive Order Number 85-52.