Vehicle Tax Florida Michigan

[ALJ35]

First: Thank you in advance for you time and help.

Question:
Is it legal or applicable for your employer to charge you a "vehicle use" tax on a company provided vehicle?



Details:
Our employer requires us to take our assigned ford escape home daily. The vehicle is logo'd. We are required to take the vehicle home due to our policy and procedures of being on call 365 days a years 24 hours a day. Also per our policy and procedures we are not allowed to drive for personal use (except time periods were that person is the primary Project Manager on call - usually 1 week a month). We are not allowed to have (verbally) any non employees in the vehicle and (written) anyone under the age of 18 in the vehicle. The company also requires us per our policy and procedures to wash the vehicle (non reimbursable) once a week. The ford escape is loaded with paperwork and tools of the trade for us to perform our job duties in the event of an emergency call. The vehicles are assigned a company gas card that stays in the vehicle.

Last year at the end of the physical year in December a certain amount was applied to our checks, then taxed and the removed. We were not informed of this prior nor signed anything for this deduction. We were told it was figured based on the distance to and from office to home. Employees that lived further we taxed more and employees that had newer or more valuable vehicles were taxed more. I have asked a dozen times to various people including accounting, HR and ownership to have this explained to us. To date this still has not been explained to us on how or why this tax is applied.

Below is a link to the GOV pdf but hard to interpret. I believe the area of discussion is around page 20.

https://www.irs.gov/pub/irs-pdf/p15b.pdf

Thanks again.

[ElleMD]

I am not certain what your question is. Page 20 is pretty clear as to how this sort of vehicle is to be handled.

[ALJ35]

I am not certain what your question is. Page 20 is pretty clear as to how this sort of vehicle is to be handled.

I dont quite understand there verbiage. Which is why im asking for clarification or any input.

[DAW]

You using a company car is taxable wages except for that usage specifically "qualified" as business expense. Commutes are always taxable. Personal use of the car is always taxable. Poor record keeping is functionally taxable.

[ALJ35]

You using a company car is taxable wages except for that usage specifically "qualified" as business expense. Commutes are always taxable. Personal use of the car is always taxable. Poor record keeping is functionally taxable.

So the question is : Because we are required to take the vehicle home for business purposes and not allowed to use it for personal use the vehicle is then 100% business use not personal. Nothing would be applicable for a tax. A lot of times we do not go from office home. We are driving directly to a jobsite or coming home after hours from an appointment in the field.

What can they tax us for and how is that value determined?

[HRinMA]

So the question is : Because we are required to take the vehicle home for business purposes and not allowed to use it for personal use the vehicle is then 100% business use not personal. Nothing would be applicable for a tax. A lot of times we do not go from office home. We are driving directly to a jobsite or coming home after hours from an appointment in the field.

What can they tax us for and how is that value determined?

Your commute from home to the office is taxable. That commute is not considered business travel. If you are driving directly to a jobsite, then the number of miles for your normal commute would be taxable. So if you drive 50 miles to a job site and from your home to office is 10 miles, then 10 of the 50 miles would be considered personal.

[ALJ35]

Your commute from home to the office is taxable. That commute is not considered business travel. If you are driving directly to a jobsite, then the number of miles for your normal commute would be taxable. So if you drive 50 miles to a job site and from your home to office is 10 miles, then 10 of the 50 miles would be considered personal.

How is this tax calculated for my 8 miles to work and 8 miles home per day?

[hr for me]

agree with the others. You are taxed on the value of driving the car on your commute. You need to look at the commuting rule on page 23 --each 1 way commute is $1.50 taxable income if you are not using the car for anything other than the commute. But there is another way to calculate off of miles and car value. If your taxable amount was more than $1.50 each way (so $3 a day), you might ask that they look into the $1.50 option.

[DAW]

Agreed. And note that the IRS has the alternatively "cheap" method to specifically address people in our situation.