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WASHINGTON - Rep. Tom Petri applauded House passage Wednesday of the Disaster Tax Relief Act, H.R. 7006. Among the provisions of this bill is a temporary increase in the standard mileage rate for charitable driving.
"When you drive your personal vehicle on a business errand, your employer can reimburse you for that expense at the rate of 58.5 cents per mile," Petri said. "If you drive your car to deliver Meals-On-Wheels to an elderly neighbor or do some other charitable work, the charity can reimburse you, but if they reimburse you that same 58.5 cents, all but 14 cents will be taxed as income."
"I think that's discriminatory and unfair," he said.
In March 2007, Petri introduced legislation to equalize the tax treatment of charitable reimbursements and business driving. While that bill has not been approved, he also helped lead a coalition in the House which urged the Ways and Means Committee to address the issue.
"I'm glad to see that they acted," he said, adding that House passage of the Disaster Tax Relief Act is a step forward as it includes a provision authorizing the Internal Revenue Service to increase the charitable rate to an appropriate level, but in any case no less than the 27 cents per mile allowed for medical transportation.
If agreed to by the Senate, the provision would be in effect for drivers beginning in 2009 and through 2011.
"Clearly, we will need to go back and make the tax relief for reimbursements permanent, and possibly more generous, but this is progress," Petri said.
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