As we noted last month, the Internal Revenue Service has raised the mileage reimbursement rate for tax deduction purposes.
The General Services Administration has now posted on their website a comparable increase in the reimbursement rate for federal employees. The new rate will not be effective until August 1st. The new rate will be 58.5 cents per mile.
Federal employees usually get the same reimbursement rate as that allowed by the Internal Revenue Service for taxpayers who use their cars for business. That current rate of reimbursement for federal employees which was set in March 2008, is 50.5 cents per mile. That figure was up from the 48.5 cents per mile set in February 2007. For the sake of comparison, a federal employee was reimbursed at a rate of 32.5 cents per mile back in 2000.
The IRS announced the new rate for taxpayers on June 23rd and it became effective on July 1st.
The General Services Administration has to coordinate the new rates with several agencies and, presumably, that is why the delay in the increase for federal employees. This may not make federal employees who are affected feel any better, but, back in 2005, GSA was able to increase the rate for all federal employees within several days after the IRS increased the rate for income tax purposes.
We noted at the time that a federal agency moving so quickly on an issue was practically unheard of. "But that may have been the ‘old GSA.’ Perhaps with news and events being reported on the internet instantaneously to people around the world, the government bureaucracy is capable of changing and responding quickly in the new environment." We also offered "congratulations to the people at the IRS and GSA who were able to move the federal machinery and put a little more money into the pockets of those that use the mileage reimbursement fees as part of their expense reimbursement."
In any event, the wheels of government bureaucracy quickly reverted to their former speed and, this time around, the rate increase took more than a month. Perhaps the "old GSA" never went away after all.