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State of Louisiana
DIVISION OF ADMINISTRATION
Office of Statewide Reporting and Accounting Policy

M. J. "Mike" Foster, Jr.
Governor

Mark C. Drennen
Commisioner of Administration

August 26, 1999

M E M O R A N D U M – SA 00-10

TO: All State Agencies, Elected Officials, Boards & Commissions, Colleges & Universities, Vocational Technical Institutions, & offices of the Executive Branch of Government

FROM: F. Howard Karlton, C.P.A.
Director

SUBJECT:

Policy and Procedures Memorandum 73 - Taxable Compensation

This is to inform you that Policy and Procedure Memorandum (PPM) 73 – Taxable Compensation has been revised. The revision has been published in the Louisiana Register, Volume 25, No. 8, August 20, 1999. Your agency’s annual report is now due on February 1 each calendar year for the immediately preceding calendar year.

All boards, commissions, departments, agencies, institutions and offices of the executive branch of state government are required to comply with the provisions of PPM 73. Department heads failing to adequately value, report, or withhold applicable taxes for compensation provided employees will be held responsible for payment of any tax liability from that budget unit's appropriations.

PPM 73 requires development of a plan each calendar year which delineates the conditions under which an employee may receive any compensation other than salary, wages, per diem for board members and benefits provided by the State Employees Group Benefits Program and various retirement systems. Reporting requirements include the specific employee receiving the compensation, the method used to value the compensation, the actual value of the compensation and any reason the compensation is fully or partially nontaxable to the employee.

Examples of the types of taxable compensation paid to employees are housing or housing allowance, meals or food allowance, personal use of a state vehicle or vehicle allowance, uniforms and/or a uniform cleaning allowance, and parking. If there are other types of taxable compensation paid by your agency not included in the above examples they must be included in your report. You should include a statement regarding the reporting of those amounts that are taxable and the withholding of applicable taxes. An example would be "These amounts are added to employees' gross income and applicable taxes are withheld from their biweekly payroll checks."

If your agency provides only one or a few types of taxable compensation, please include a statement in your agency's report that no other forms of taxable compensation are provided. Should your agency provide no forms of taxable compensation, your report should contain such a statement.

Agencies providing personal use of a state vehicle to control employees may not use the commuting valuation rule as the valuation method. Alternative valuation methods are available in the Internal Revenue Code and Regulations. These alternative valuation methods may only be used with prior permission of this office. If you currently have a format that fits your agency's needs, that format may be used. If you are unsure of how to report taxable compensation, the following format may be used or adapted for your agency.   

Employee Name

Type of Compensation

Valuation Method

Value to Employee

Taxable/Nontaxable

Comments

Doe, John Personal use of state vehicle Daily Commute $3.00/day Taxable

Should you have any questions regarding PPM 73 reporting requirements, contact me at (225) 342-6300 or Ms. Valinda Smith at (225) 342-2209.

FHK/VS/rl