Mileage reimbursement rate may increase in 2004

Federal travelers may see an increase in their mileage reimbursement rate in 2004 if the General Services Administration follows suit with the Internal Revenue Service, which recently announced rates would increase to 37.5 cents per mile next year.

Currently, federal employees who travel in their own cars on government business are reimbursed 36 cents per mile, a rate set earlier this year by GSA. Federal employee mileage reimbursement rates are based on data collected by GSA, but by law (41 CFR Part 301-10), the governmentwide rate cannot exceed the rate set by the IRS.

The IRS hires a contractor each year to study the costs of operating a vehicle, including gas prices, oil, tires and general maintenance costs. In 2003, despite higher gasoline costs, the rate dropped from 36.5-cents-per-mile in 2002 to 36-cents-per-mile. On Oct. 17, the IRS announced the rate would increase to 37.5-cents-per-mile in 2004.

By law, GSA is required to independently review the IRS study that determined the new rates and then set its own rate, which is usually published in the Federal Register in January. In recent years, GSA's rate has mirrored that of the IRS.

Under federal travel regulations, employees may use personal vehicles for official travel if authorized by their agency. If an agency authorizes travel by other means, such as travel by air, and employees drive their own cars instead, reimbursement rates are limited to the cost of the authorized means of travel.

The mileage reimbursement rate does not apply to employee relocations. Relocations are designated as transportation expenses, not as an allowance for the cost and operation of the vehicle, according to GSA.

Source: General Services Administration