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University of Iowa Committee on Human Rights policies, 1958-1986

1963-10-04 Travel Regulations University Staff and Employees Page 2

8.2

Transportation tax cannot be paid from funds administered by the University. Tax exemption is claimed by the person making the trip by furnishing the ticket agent with the tax exemption certificate form furnished by the University Business Office. 

If all, or a portion, of the transportation expense is to be paid from personal funds or by some organization outside the University, then the staff member may or may not be required to pay transportation tax, depending on the circumstances. Outlined below are three sets of circumstances that might prevail, followed in each case by the decision of the Bureau of Internal Revenue. 

1. A staff member received University approval to make a trip on official University business, and he is advised by his department head that the University will allow up to $50 toward his expenses. The tax exempt fare for this trip is $75, or $25 more than the amount of reimbursement the staff member will receive from the University. 

"You attention is directed to Revenue Ruling #697 published in 1955 wherein it was held that payments made by a state-operated school from its own funds for the transportation of its faculty and staff members to national and regional educational conventions constitute payments for transportation furnished to a state under the provisions of Seection 4261 of the 1954 Code and are exempt from the tac on the transportation of persons imposed by Section 4261 of the Code. The Form 731, in such an instance, must be presented to the carrier at the time the charges are paid. Where a portion of the cost of transportation is paid from funds of the school and the remainder by the staff member from his own funds, the exemption applies only to the portion of the charges paid from school funds. In such a case the exemption certificate must show separately the amount of the exempt transportation paid from funds of the school and the amount of the non exempt transportation paid by the staff member."

2. A staff member received University approval to make a trip on official University business at University expense and signs the tax exemption certificate (Form 731) when purchasing his transportation ticket, for which he expects to be later reimbursed by the University. Subsequently, but before claiming reimbursement from the University, he is advised that an organization outside the University will pay for the expenses of the trip. The organization reimburses the staff member and, consequently , he does not claim reimbursement from the University. 

"Accordingly, in the situation referred to in (2), the requirements for the exemption were not met. Although the staff member had been 

Issued 10-5-60

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8.2 Transportation tax cannot be paid from funds administered by the University. Tax exemption is claimed by the person making the trip by furnishing the ticket agent with the tax exemption certificate form furnished by the University Business Office. If all, or a portion, of the transportation expense is to be paid from personal funds or by some organization outside the University, then the staff member may or may not be required to pay transportation tax, depending on the circumstances. Outlined below are three sets of circumstances that might prevail, followed in each case by the decision of the Bureau of Internal Revenue. 1. A staff member received University approval to make a trip on official University business, and he is advised by his department head that the University will allow up to $50 toward his expenses. The tax exempt fare for this trip is $75, or $25 more than the amount of reimbursement the staff member will receive from the University. "You attention is directed to Revenue Ruling #697 published in 1955 wherein it was held that payments made by a state-operated school from its own funds for the transportation of its faculty and staff members to national and regional educational conventions constitute payments for transportation furnished to a state under the provisions of Seection 4261 of the 1954 Code and are exempt from the tac on the transportation of persons imposed by Section 4261 of the Code. The Form 731, in such an instance, must be presented to the carrier at the time the charges are paid. Where a portion of the cost of transportation is paid from funds of the school and the remainder by the staff member from his own funds, the exemption applies only to the portion of the charges paid from school funds. In such a case the exemption certificate must show separately the amount of the exempt transportation paid from funds of the school and the amount of the non exempt transportation paid by the staff member." 2. A staff member received University approval to make a trip on official University business at University expense and signs the tax exemption certificate (Form 731) when purchasing his transportation ticket, for which he expects to be later reimbursed by the University. Subsequently, but before claiming reimbursement from the University, he is advised that an organization outside the University will pay for the expenses of the trip. The organization reimburses the staff member and, consequently , he does not claim reimbursement from the University. "Accordingly, in the situation referred to in (2), the requirements for the exemption were not met. Although the staff member had been Issued 10-5-60