Qualified Nonpersonal Use Vehicles
Qualified Nonpersonal Use Vehicles (QNPUVs) are specialized vehicles designed exclusively for business-related purposes. They are typically vehicles like delivery trucks, cargo vans, tow trucks, and construction vehicles – all of which are impractical for personal, everyday uses.
In fact, these vehicles are so far removed from standard automobiles, that they don’t meet the IRS criteria for the term “car”. As a result, providing a QNPUV to an employee is not a taxable fringe benefit. By its nature, a QNPUV is deemed to have no value to the employee.
The Internal Revenue Service (IRS) defines QNPUVs based on factors laid out in Publication 15-B:
- The vehicle must be designed for business
- The vehicle must incur substantial, documented business use (personal use is only incidental and “de minimis”)
- The vehicle must be equipped appropriately to carry out business-related tasks
- The vehicle must be clearly marked with a business name or logo
- The vehicle must meet industry-specific safety measures
Because QNPUVs do not meet the IRS definition of a car, they cannot be driven on mileage-oriented reimbursement programs like FAVR, accountable allowances, or cents per mile.
To learn more about vehicle reimbursement programs, consider speaking to a Cardata expert.
To find out how Qualified Nonpersonal Use Vehicles work with Cardata programs, click here.