Can the North Carolina State Highway Patrol assign State-owned vehicles to civilian (non-sworn) employees like radio technicians and mechanics to drive home and back, and if so, do those civilian employees have to pay the State a commuting fee?

Plain-English summary

Colonel R.A. Barefoot ran the State Highway Patrol in 1993 and had a fleet question. State-owned passenger vehicles came with a commuting fee under N.C.G.S. § 143-341(8)i.7a; an employee who drove a State vehicle between home and work reimbursed the State at a rate set by the Department of Administration. But the statute had a catch-all exception for "any other vehicle exempted by Internal Revenue Service's regulations." Could the Patrol assign vehicles to civilian (non-sworn) personnel like radio technicians, communication center supervisors, and mechanic supervisors who were on-call and required to respond to emergencies? And if so, did the commuting fee apply?

Special Deputy Attorney General Isaac T. Avery III answered yes to assignment and no to the fee.

The legal pathway ran through a 1989 IRS opinion letter. In response to a question from the South Carolina Emergency Management Department, the IRS Southeast Region director Michael R. Allen had written to U.S. Representative Arthur Ravenel, Jr. that government emergency-response vehicles driven to and from work as part of the employee's job duties were not a taxable fringe benefit. The NC Department of Administration adopted that interpretation by an April 11, 1991 internal memorandum from James E. Rhodes to Assistant Secretary E.B. Jackson.

The opinion says both federal regulations and N.C.G.S. § 143-341(8)i.7a include the catch-all phrase "any other vehicle exempted by Internal Revenue Service's regulations." Based on the IRS letter, the AG concluded that a vehicle assigned to an on-call civilian Highway Patrol employee required to respond to emergencies was exempt from federal taxation and no commuting fee was due.

Special-purpose vans got a separate IRS escape hatch. The IRS treated vans modified so they could not realistically be used for personal driving as exempt under the de minimis personal-use rule (Federal Register, Vol. 50, No. 215, p. 84). The Patrol's radio engineer vans had shelving filling most of the cargo area and bore the Highway Patrol insignia. They qualified.

Net result: the Patrol could put civilian on-call staff in State vehicles, and those staff drove home and to work without writing checks back to the State.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

N.C.G.S. § 143-341(8)i.7a generally required a person driving a State-owned passenger vehicle between home and the official work station to reimburse the State at a rate set by the Department of Administration. The opinion says the statute and federal regulations contained an exception for vehicles exempted by IRS regulations. It also says the Department's commuting policy incorporated the statutory exemptions, citing 1 N.C.A.C. 38.0402.

The IRS had told the South Carolina Emergency Management Department that government emergency vehicles driven between home and work as part of job responsibilities were not taxable. The North Carolina Department of Administration agreed with that interpretation in an April 1991 memorandum. Applying it, the AG concluded that vehicles assigned to on-call Highway Patrol civilian employees required to respond to emergencies were exempt and that no commuting fee was due.

The opinion gives a separate reason for radio engineer vans. Under the cited IRS interpretation, vans modified so that more than minimal personal use was unlikely were exempt. The opinion pointed to the vans' installed tool shelves and Highway Patrol insignia.

Common questions

Which civilian workers did the opinion discuss?

It named radio technicians, communication-center supervisors, mechanic supervisors, and other civilian staff who were on call and required to respond to emergencies. The Patrol could choose whether to assign them State vehicles.

Did the opinion approve personal errands in those vehicles?

It addressed commuting and emergency response. It did not decide whether other personal use was permitted.

Did the opinion set a recordkeeping rule for vehicle assignments?

No. It says only that the Department of Administration adopted a commuting policy incorporating the state statute and its exemptions, citing 1 N.C.A.C. 38.0402. It does not discuss logs or documentation.

Source

• Landing page: https://ncdoj.gov/opinions/authorization-of-civilian-employees-to-commute-in-state-owned-vehicles-payment-of-fee/

Citations

• N.C.G.S. § 143-341(8)i.7a
• 1 N.C.A.C. 38.0402
• IRS Federal Register, Vol. 50, No. 215, p. 84 (qualified nonpersonal-use vehicles / de minimis personal use)
• IRS letter from Michael R. Allen, Southeast Region Director, to Hon. Arthur Ravenel, Jr. (July 18, 1989)
• NC Department of Administration memorandum from James E. Rhodes to Assistant Secretary E.B. Jackson (April 11, 1991)

Original opinion text

May 17, 1993

TO: COLONEL R.A. BAREFOOT
STATE HIGHWAY PATROL

FROM: ISAAC T. AVERY, III
SPECIAL DEPUTY ATTORNEY GENERAL

RE: AUTHORIZATION OF CIVILIAN EMPLOYEES TO COMMUTE IN STATE-OWNED VEHICLES/PAYMENT OF FEE

The question you pose is whether civilian personnel of the Highway Patrol are authorized to commute in State-owned vehicles; and if so, are these employees required to pay a commuting fee. Yes, they are authorized to commute in State-owned vehicles if you so choose to assign them a vehicle; and no, under Internal Revenue Service interpretation, these persons would not have to claim this as a taxable fringe benefit. Consequently, a commuting fee need not be paid to the State.

State law provides that the Department of Administration, with the approval of the Governor, may adopt and enforce rules relating to the permanent assignment of State motor vehicles and the use and reimbursement for those vehicles for commuting. N.C.G.S. 143-341(8)i.7a. The statute further requires every individual who uses a State-owned passenger vehicle to drive between his official work station and his home to reimburse the State for these trips at a rate computed by the Department of Administration. However, certain vehicles are exempt from this fee. This statute tracks the federal Internal Revenue Code provisions on taxation of fringe benefits which lists use of the same vehicle for commuting as being exempt from federal taxation. Both the federal regulations and State law include a catch-all provision of "any other vehicle exempted by Internal Revenue Service's regulations." The Department of Administration has adopted a commuting policy. This policy incorporates State statutes including the exemptions. See 1 N.C.A.C. 38.0402.

The Internal Revenue Service has issued commuting policy opinions on certain vehicles. In response to a question by the South Carolina Emergency Management Department, the Internal Revenue Service opined that government emergency vehicles driven to and from work as a matter of job responsibility are not taxable. (See July 18, 1989 letter from Michael R. Allen, Director, Internal Revenue Service, Southeast Region, to the Honorable Arthur Ravenel, Jr.) The North Carolina Department of Administration agreed with this interpretation by April 11, 1991 memorandum from James E. Rhodes to Assistant Secretary E.B. Jackson.

Based upon the opinion of the Internal Revenue Service, any vehicle assigned to a non-law enforcement civilian employee who is on-call and required to respond to emergencies is exempt from federal taxation. The use of a State vehicle by a radio technician, a communication centers supervisor, a mechanic supervisor, or other civilian personnel who are on-call and required to respond to emergencies, falls under this exemption.

In addition to the opinion letter, under the interpretation given by the Internal Revenue Service in the Federal Register, Volume 50, No. 215, p. 84, vans that have been specially modified with the result that they are not likely to be used more than a de minimus amount for personal use, for example, permanent shelving that fills most of the cargo area carrying equipment, plus specially painted with the company name, are exempt. Vans issued to radio engineers fall under this provision due to the installed shelves for carrying tools and the Highway Patrol insignia being displayed on the vans.

If you need further information concerning this matter, please do not hesitate to contact our office.