The Internal Revenue Service next year will raise the allowable vehicle reimbursement rate to 50.5 cents per mile, which is the highest rate in history. The increase largely is attributed to growth in the cost of fuel and other vehicle expenses and is up from the 2007 rate of 48.5 cents per mile and the 2006 rate of 44.5 cents per mile.
"The increase in the 2008 national per-mile rate reflects a combination of factors, including higher fuel prices, rising insurance costs and higher depreciation costs," said Ted Schuerman, Government Services director of research and client services at Runzheimer International, which helps the IRS calculate the rate. "Remaining cost components, such as maintenance and registration costs, remained relatively stable."
Although it is not mandatory for companies to follow the IRS safe-harbor rate, most companies use it as guidance for reimbursing employees who use personal vehicles for business travel. More than 80 percent of 171 respondents in
Business Travel News' third annual Expense Managers Survey last year said they used the IRS rate for reimbursement
(BTN, Oct. 23, 2006).