NYS Comptroller Seal

 

Bureau of State Payroll Services

 

  Date:  November 7, 2003
            Reissued
Bulletin No. 437

Subject Reporting the Taxable Value of Personal Use of Employer- Provided Vehicles for 2003
Purpose To provide instructions for reporting the taxable value of employer-provided vehicles for 2003.
Affected Employees Employees with employer-provided vehicles.
Effective
Date
Immediately
Background OSC will report the value of personal use of an employer-provided vehicle, for the period November 1, 2002 through October 31, 2003, as income on 2003 W-2's. Therefore, the taxable amounts for 2003 should be reported as soon as possible, but no later than Payroll Period 18-Lag and Payroll Period 19-Current for Institution and Payroll Period 19-Lag and Payroll Period 20-Current for Administration.
Determining the Value The following rules are in effect for the reporting period:

Annual Lease Value Method (ALV)
Employees who have unrestricted use of a vehicle should use this method. Employees who are prohibited from using a vehicle for personal use cannot use this method. The ALV of a car is determined as follows:
1. Determine the fair market value of the car as of the first day on which it was made available to any employee of the employer for personal use.
2. Find the ALV in the table linked to this bulletin for the appropriate fair market value of the car as determined in step 1 above.


Fixed Rate Per Mile Method
Employees can use this method as an alternative to either the Annual Lease Value method or the Special Commuting Rule method. The Fixed Rate Per Mile Method cannot be used for automobiles that were first made available for employees' personal use in 2003 if the fair market value exceeds $15,200.

If gasoline is not supplied or reimbursed, the rate per mile is 30.5 cents per mile. If gasoline is supplied or reimbursed by the employer, the rate is 36.0 cents per mile.

Special Commuting Rule
Commuting is valued at $1.50 each way ($3.00 per round trip) for each day the vehicle is used for commuting. Employees who are prohibited from using a vehicle for personal use must use this method. Employees who have unrestricted use of a vehicle and employees whose annual salary is equal to or greater than $125,400 are not permitted to use the Special Commuting Rule.

State Officers
State Officers who have a vehicle for unrestricted use (as defined on Page 3 of Bulletin P-750 issued December 1, 1992) should be reminded of the following provisions of the rules:

1. Officers who have the same vehicle as they had in 2002 must use the same method as they used last year to determine the taxable value. They must also use that method for all future reporting periods. Officers who have had the same vehicle since January 1, 1999 (4 full years) may re-compute the annual lease value for this reporting period.
2. Officers newly assigned a vehicle, or who receive a replacement vehicle, may choose either the Annual Lease Value method or the Fixed Rate Per Mile Method for the new vehicle; however, that method must be used for all future periods during which they have the vehicle. Once the Annual Lease Value has been established, it must be used for a four-year period or until the individual no longer has the vehicle.
3. Officers are responsible for maintaining documentation to support the business use of the vehicle. The standard for record keeping is "adequate records or sufficient evidence" to support any business use of their vehicle.

Examples of acceptable substantiation are: account books, diaries, log receipts, bills, trip sheets or expense forms. Written records made at or near the time the expense was incurred should be maintained to document the time, date, place and purpose of business travel.

A form similar to the sample (AC 3173) linked to this Bulletin should be completed and signed by each employee covered by the regulations. The form should be retained by the agency.

Agency Actions Agencies may enter the taxable value using the earn code FRB into the Payroll System on the Time Entry Pages or through the agency Miscellaneous File. For information regarding submission of Time Entry transactions, see Payroll Bulletin No. 408.
W-2 Information The taxable value of personal use of an employer- provided vehicle is subject to Income and Social Security/Medicare taxes and must be reported as income on the W-2. New York State will not withhold federal income taxes. However, State, local and Social Security / Medicare taxes must be withheld.

While OSC cannot withhold taxes for inactive employees, OSC will include the taxable value on the employee's W-2.

The amount is not considered salary for the purposes of computing retirement benefits.
Check/Advice The amount will appear on the check and/or direct deposit advice and will be included in the YTD Gross.
Questions Questions regarding time entry transactions may be directed to your agency's Payroll Auditor.

Questions regarding adjustments to employee W-2's and taxable value calculation may be directed to the Payroll Deductions mailbox.