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Federal and State Mileage Rates

Reference Number: MTAS-1749
Reviewed Date: 01/05/2021

The Internal Revenue Service periodically announces changes in the optional standard mileage rate. The optional rate may be used to reimburse employees for the use of personal vehicles in the course of business activities.

The rate for 2021 is 56 cents cents per mile for all business miles driven on or after January 1, 2021. You can go to IRS Notice 2021-02 at https://www.irs.gov/pub/irs-drop/n-21-02.pdf  for details and further explanations.

Municipalities that reimburse employees for business use of their personal vehicles based on the federal optional standard rate should revise their travel policies to reflect this change if necessary.

For those municipalities that reimburse employees for business use based on the state of Tennessee mileage rate, the current rate effective August 1, 2011, is 47 cents per mile.