The Internal Revenue Service today adjusted its 2006 allowable vehicle reimbursement rate to 44.5 cents per mile. Today's move follows a rare midyear adjustment in September to 48.5 cents per mile, representing an 8-cent increase following Hurricane Katrina and subsequent gas price hikes
(BTNonline, Sept. 12).
When it adjusted the rate used for the first 8 months of 2005 in September, IRS noted surging gasoline costs, which hovered above $3 per gallon at the time. Since then, however, gasoline costs have abated-AAA today said the current national average for regular gasoline is $2.12 per gallon-and IRS is following with its own downward alteration.
"The IRS took the extraordinary step of temporarily increasing the standard mileage rates in the aftermath of Hurricane Katrina," IRS commissioner Mark Everson said in a statement. "We promised to continue closely monitoring the situation. The 2006 mileage rates reflect that gas prices have dropped."
The majority of companies rely on the IRS safe harbor rate when reimbursing travelers who use their personal vehicles for business travel. According to results from
Business Travel News' second annual Expense Managers Survey of 204 expense managers earlier this year, 72 percent said they rely on the rate for reimbursements.