Printed on September 25, 2017, 10:05 am
Business and Finance Guidelines
TCATs, Community Colleges, System Office
Section II of TBR Policy 4:03:02:00 provides for the assignment of an institutional motor vehicle to certain persons for their official use. Positions included within this policy are the Presidents of institutions, TCAT Directors, the Chancellor, Vice Chancellors, and Legal Counsel. The purpose of this guideline is to provide structure to the assignment of vehicles under this policy.
- An Eligible Executive includes positions cited in the TBR Motor Vehicle Policy (4:03 :02:00), Section II . At the time of employment, an Eligible Executive may elect to receive:
- Assignment of an institutional motor vehicle for their use; or
- A motor vehicle allowance.
- This election should be made at either:
- The time of employment, or
- As assigned motor vehicles are replaced.
- This replacement should occur as needed based on the useful life of the vehicle and accumulated mileage.
- In no circumstances should the replacement cycle be less than three (3) years.
- Once an employee elects to take the motor vehicle allowance, the employee cannot change to an assigned vehicle.
- Assignment of an Institutional Motor Vehicle
- Eligible Executives selecting this option shall be provided an appropriate motor vehicle by the institution. For purposes of this plan, an appropriate motor vehicle is defined as a late model (no more than five years old) four-door passenger mid-size or full size sedan. The Chancellor shall approve the selection of assigned vehicles for eligible executives. Operating and maintenance cost of the assigned motor vehicle shall be the responsibility of the institution. In recognition that use of the assigned motor vehicle may include non-business use Eligible Executives are required to maintain appropriate types and amounts of insurance to cover any non-business use of the motor vehicle.
- To the degree that the motor vehicle assigned is used for non-business purposes, it is the responsibility of the institution to report on the employee's Form W-2 the value of such personal use in the employee's income as compensation subject to withholding for federal income taxes and applicable FICA taxes. Additionally, these amounts shall be considered as compensation for employee benefit purposes.
- Motor Vehicle Allowance
- Eligible Executives selecting this option shall receive a monthly cash allowance from the institution. In recognition of this payment, the Eligible Executive shall be responsible for all expenses attendant to the:
- Purchase or lease (and replacement as needed) of a motor vehicle appropriately suited for the conduct of institutional business. For purposes of this plan, an appropriate motor vehicle is defined as a late model (no more than five years old) four-door passenger mid-size or full size sedan; and
- Operation, insurance, maintenance, and repair cost of said motor vehicle.
- The monthly automobile allowance amount shall be set in the Eligible Employee's employment agreement.
- The allowance consists of two components:
- A capital component based on the estimated monthly lease value of a full sized sedan; and
- An operating component that applies a mileage rate that considers only the marginal operational cost of a vehicle and assumes 12,000 business miles are driven annually.
- It is the responsibility of the business and finance area of the System Office to initially calculate and periodically update the monthly automobile allowance amount.
- The monthly automobile allowance will be reviewed and adjusted periodically in conjunction with future compensation studies for presidents and other system executives.
- The monthly automobile allowance, under Internal Revenue Service (IRS) Regulations, must be included in compensation on the employee's Form W-2 and is subject to federal withholding and applicable FICA taxes. Additionally, automobile allowance payments are considered compensation for employee benefit purposes.
- Eligible Executives whose business related travel exceeds 12,000 miles annually are eligible to be reimbursed for business related mileage. If requesting such reimbursement, the Eligible Executive must provide the institution with a log that documents that the motor vehicle for which the allowance is paid has been used for 12,000 business related miles. The log submitted should comply with IRS guidance for documentation of business usage of a motor vehicle. Once this annual 12,000 mile threshold is achieved, the Eligible Executive may submit mileage reimbursement requests for any business related miles that exceed 12,000 miles. The reimbursement rate shall equal the Board's then current approved mileage rate, less the then current IRS standard mileage rate attributed to depreciation. Mileage reimbursement paid under this item are not considered compensation for income tax purposes and are not subject to federal withholding and applicable FICA taxes.
- Each institution is responsible for funding the provisions of this plan.
NEW Guideline approved at President's Meeting, May 19, 2015. Revisions approved at November 8, 2016 Presidents Meeting; Revised at Presidents Meeting May 16, 2017.