Torben Robertson

Aug 17, 2023

10 mins

US State Mileage Reimbursement Rules

Mileage Reimbursement

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When it comes to mileage reimbursement, each state in the US has its own set of rules and regulations that govern how employers should compensate their employees for business-related travel. While most states adhere to federal guidelines for mileage reimbursement, there are exceptions. In this comprehensive guide, we’ll explore the mileage reimbursement rules in several key states and shed light on the unique regulations in Massachusetts, California, and Illinois.

Top Ten State Mileage Reimbursement Rules

To learn more about mileage reimbursement rules and rates in these top ten states just click the link to go to a specific state:

Mileage Reimbursement: A Brief Overview

Mileage reimbursement is the practice of compensating employees for the costs incurred during work-related travel using their personal vehicles. It’s crucial for employers and employees alike to understand these regulations to ensure accurate and fair compensation for travel expenses.

Federal Guidelines

The Internal Revenue Service (IRS) establishes federal guidelines for mileage reimbursement rates. These rates are periodically updated and are designed to cover both fuel costs and general wear and tear on a vehicle. As of the latest update, the standard mileage rate for business travel is $0.655 per mile.

State-Specific Mileage Reimbursement Rules

While most states follow federal guidelines for mileage reimbursement, some have unique regulations that differentiate them from the standard federal rates. Let’s take a closer look at the specific rules in Massachusetts, California, and Illinois.

Massachusetts Mileage Reimbursement Rules

In Massachusetts, the mileage reimbursement rules stand out from the federal norms. Employers in the state are required to reimburse employees for the “reasonable expenses” incurred during business-related travel. This means that employers must cover all reasonable and necessary expenses related to the use of a personal vehicle for work purposes, including mileage.

California Mileage Reimbursement Rules

Similar to Massachusetts, California has specific mileage reimbursement rules that exceed federal guidelines. Employers in California are legally obligated to reimburse employees for all necessary expenditures they incur while performing job-related tasks. This includes mileage as well as other costs associated with vehicle usage.

Illinois Mileage Reimbursement Rules

Illinois also deviates from the federal standard by requiring employers to reimburse employees for necessary job-related expenses, which includes mileage. The key difference in Illinois is that employers are obligated to cover these expenses even if they don’t have a written reimbursement policy in place.

Other States and Federal Guidelines

In contrast to Massachusetts, California, and Illinois, the other states, including Ohio, Georgia, Michigan, Florida, New York, Pennsylvania, and North Carolina, generally follow federal mileage reimbursement guidelines. These states abide by the IRS-approved standard mileage rate to calculate reimbursements for business travel expenses.

Minnesota Mileage Reimbursement

For both state employees and private employers, Minnesota has clearly defined guidelines that diverge slightly from federal IRS standards. State employees qualify for different rates depending on whether a state-owned vehicle is available, while private employers are encouraged—but not legally required—to follow the IRS rate. Learn more about Minnesota’s rules and tax implications, plus best practices for mileage tracking:

Minnesota Mileage Reimbursement: Rules, Rates

Maine Mileage Reimbursement

Maine relies on a framework that aligns partially with federal guidelines, but it also sets its own rates for state employees—typically 75% of the federal rate. For private employers, adopting the IRS rate is common, though not mandated. Here’s a closer look at rate adjustments, Workers’ Compensation requirements, and practical guidance for businesses:

Mileage Reimbursement Rules and Laws in Maine

Mississippi Mileage Reimbursement

While Mississippi generally follows the IRS rate for mileage reimbursement, the state has specific rules for its employees (including reduced rates if a state vehicle is offered) and mandatory coverage for Workers’ Compensation travel. Private employers aren’t bound by a set rate but often mirror federal guidelines for simplicity:

Mississippi Mileage Reimbursement

Kentucky Mileage Reimbursement

In Kentucky, private employers are free to choose a policy—often matching the IRS rate—while state employees receive reimbursements tied directly to average fuel costs. Regular quarterly adjustments ensure rates for state workers reflect real-time price changes. For comprehensive details and tax implications:

Kentucky Mileage Reimbursement: Rules, Rates, Best Practices

Louisiana Mileage Reimbursement

Louisiana mandates a $0.70-per-mile rate for 2025 for state employees, with additional rules for Workers’ Compensation–related travel. For private employers, there’s no legal requirement to reimburse mileage—unless connected to Workers’ Comp. Detailed recordkeeping is key to compliance:

Louisiana Mileage Reimbursement Laws and Rates

Kansas Mileage Reimbursement

State employees in Kansas have different per-mile rates depending on the type of vehicle—cars, motorcycles, or airplanes—and private employers typically align with the IRS standard. Detailed mileage logs and thorough documentation keep both employers and employees compliant and fairly compensated:

Kansas Mileage Reimbursement Rates and Rules

Iowa Mileage Reimbursement

State employees in Iowa must follow Iowa Code §8A.363, which ties reimbursements to the IRS rate. Private employers often match that rate but may set their own standards. Minimum wage considerations, Workers’ Compensation guidelines, and clarity around mileage tracking are all covered here:

Mileage Reimbursement Rules and Rates in Iowa

Idaho Mileage Reimbursement

Idaho typically follows IRS guidelines, but state employees must abide by Section 67-2004 for official travel reimbursements. Workers’ Compensation mileage is mandatory for job-related medical appointments, and private employers can create custom programs like FAVR or Tax-Free Car Allowance:

Idaho Vehicle Reimbursement Rules and Laws

Hawaii Mileage Reimbursement

In Hawaii, state employees have a clear right to mileage reimbursement under Code §3-10-13, usually aligned with the IRS rate. Private employers aren’t required to reimburse, except in certain Workers’ Comp scenarios. Keeping records and clarifying policies are essential:

Hawaii Vehicle Reimbursement Rules and Laws

Delaware Mileage Reimbursement

Delaware’s state employees receive a set rate (50¢ per mile), but private employers usually follow either Delaware’s state rate or the IRS rate. Important topics include preventing wages from slipping below minimum wage, plus special rules for Workers’ Compensation travel:

Mileage Reimbursement in Delaware

Connecticut Mileage Reimbursement

There’s no strict reimbursement law for private companies in Connecticut—employers often use the IRS rate. However, workplace injury travel is reimbursable under Workers’ Compensation, and minimum wage laws may require additional payments for heavy drivers. More details here:

Mileage Reimbursement in Connecticut

Alabama Mileage Reimbursement

Alabama requires that state employees be reimbursed at the IRS rate ($0.70 in 2025), and private employers have no statutory mileage obligation—except for Workers’ Comp–related travel. Many businesses opt to follow the federal standard or set up a formal reimbursement program:

Alabama Mileage Reimbursement Rules

Alaska Mileage Reimbursement

For state employees, Alaska law references the IRS rate for official travel, while Workers’ Compensation mandates mileage coverage for medical appointments. Private employers don’t have a legal reimbursement requirement but frequently adopt the IRS rate to reduce wage compliance issues:

Alaska Mileage Reimbursement Rules

Arkansas Mileage Reimbursement

In Arkansas, state employees must be reimbursed at the published rate ($0.70 in 2025), and Workers’ Comp mileage is obligatory. For everyday business travel, private employers aren’t bound by law but often mirror federal standards. Tech tools and recordkeeping tips can smooth out the process:

Arkansas Mileage Reimbursement Rules

Colorado Mileage Reimbursement

Colorado applies unique reimbursements of 90% of the IRS rate for 2WD and 95% for 4WD vehicles for state employees. Private employers typically use or approximate the IRS rate. Staying above the minimum wage and preserving accurate logs are key considerations:

Colorado Mileage Reimbursement Rules

Wisconsin Mileage Reimbursement

Wisconsin generally follows the IRS guidelines, although state employees may see variations approved by the Division of Personnel Management (DPM). Employers and employees alike need to keep close track of mileage logs to avoid wage or tax issues.

Mileage Reimbursement for Wisconsin

Missouri Mileage Reimbursement

No law forces private employers in Missouri to follow the IRS rate, yet most do to keep calculations simple. State employees, however, abide by set policies, and Workers’ Compensation mileage is required. Here’s how to stay compliant and plan effectively:

Mileage Reimbursement in Missouri in 2024

Maryland Mileage Reimbursement

Maryland doesn’t impose strict rules on private employers, but many match the IRS rate to maintain fairness and avoid wage pitfalls. For state employees, guidelines often align with federal norms. Carefully logging mileage and understanding the FLSA are critical:

Mileage Reimbursement in Maryland: What you should know in 2025

Indiana Mileage Reimbursement

Indiana does not mandate a specific rate for private employers; the IRS standard remains the practical choice for most. Drivers should keep detailed logs to deduct travel costs at tax time, and minimum wage compliance can come into play with extensive driving:

Understanding Mileage Reimbursement in Indiana

Tennessee Mileage Reimbursement

Like other states, Tennessee lacks a formal private-sector mandate, but state agencies typically follow or approximate the IRS rate. If employee expenses drive their effective wage below the minimum, employers must compensate. See more tips for compliance:

Mileage reimbursement for Tennessee

Washington Mileage Reimbursement

Washington State also abides by the federal IRS rate in most private contexts. That said, private businesses should ensure reimbursement programs don’t push wages under the federal minimum. Digital mileage tracking and consistent policies help both parties:

Mileage reimbursement in Washington state

Arizona Mileage Reimbursement

Arizona defers to federal guidelines, so private employers often adopt the IRS standard. As with most states, employees’ effective pay can’t sink below minimum wage due to travel costs, and thorough mileage tracking is crucial for all:

Mileage reimbursement in Arizona

Virginia Mileage Reimbursement

Virginia doesn’t require private employers to reimburse mileage, but many choose to do so at or near the IRS rate. Key points include ensuring employees aren’t shorted below minimum wage and that mileage logs meet IRS criteria:

Mileage Reimbursement in Virginia

Tax Implications of Mileage Reimbursement

It’s important to note that mileage reimbursement can have tax implications for both employers and employees. The IRS-approved mileage rate is designed to cover various vehicle-related expenses, including fuel, maintenance, and depreciation. Reimbursing employees at or below this rate is considered a non-taxable expense. However, if employers reimburse at a higher rate, the excess may be subject to income tax.

In Conclusion

Mileage reimbursement rules in the United States can vary significantly from state to state. While most states adhere to federal guidelines for mileage reimbursement, Massachusetts, California, and Illinois have distinct regulations that require employers to provide more comprehensive compensation for business-related travel. Employers and employees should be well-informed about these rules to ensure compliance and fair compensation. Whether your state follows federal guidelines or has specific regulations, understanding the intricacies of mileage reimbursement is essential for a smooth and transparent employer-employee relationship.

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