Amid escalating fuel costs, the Internal Revenue Service on July 1 will raise its mileage reimbursement rate by 8 cents to 58.5 cents per mile.
AAA today reported an average price for regular unleaded gas of $4.07. The cost is about a dollar higher than what AAA reported at the beginning of 2008, when the rate rose from 44.5 cents per mile to 50.5 cents per mile.
The IRS typically sets the mileage rate in the fall for the following year. While midyear adjustments are rare, this marks the second time the IRS has done so in recent years, the last time being after the post-Hurricane Katrina spike in gas prices
(BTNonline, Sept. 12, 2005).
While not a requirement, most businesses use the IRS rate as a guideline in reimbursing their drivers. In Business Travel News' 2006 Expense Manager's Survey, 82.5 percent of 221 responding travel and expense managers said they used the IRS safe-harbor rate to reimburse its travelers.