We have some employees who drive company vehicles (normal SUV’s) but we prohibit personal use. Their regular work week is 2 days in the office where they drive their personal vehicles and 3 days out of town where they drive the company vehicle. IF the employee needs to drive the company vehicle into the office to print a report or pick up some supplies prior to leaving town (5 minute stop), is that taxable to the employee? If so, would it be considered a one-way commute or a two-way commute and does the direction of the out of town location make a difference?

Now, what if they drive the company vehicle into work, work a half day, and then leave for the out of town location? Does that change the answer?

#1;I do not think so as long as the company vehicle is used for business/employment purposes by the EE and UNLESS the vehicle is used for personal use.


#2; As long as it is used for official business use, it is nontaxable to the EE.

#3;I do no think so either; there is generally no tax assessed to the EE who uses a company-owned vehicle solely for business purposes. For the company, the vehicle would be 100% deductible as an expense. Taxes are required if the vehicle is driven for personal use. Personal use of athe company vehicle is any non-business use, including commuting, vacations, weekend use and miles driven by the EE’s spouse or dependents. The IRS defines such use as a non-cash benefit, with taxes based upon the value of the benefit. Records for business and personal mileage are required. If records identifying the amount of business and personal use are not provided, the vehicle is considered wages to the EE. If records are provided, only the personal use, if there is, is considered as wages for the EE.