14.13 Meal Reimbursement

Policy Information

Policy Number: 14.13	Effective Date: 07/11/12
Responsible Unit: FSO Operations - Travel	Last Revised Date: 10/04/17
Email:  fso_travel_pay@fso.arizona.edu	Phone: 520.621.9097

Purpose and Summary

To provide policy and procedures on meal expenses and reimbursements.

Source

State of Arizona Travel Policy
Internal Revenue Service, including but not limited to, Publication 463

Scope

This policy applies University-wide, including Main Campus, the Arizona Health Sciences Campus, the Phoenix Biomedical Campus, and University of Arizona – South. In addition, this policy applies to all extension off-site campus units, both domestic and international.  

Definitions

1. Per Diem/Meal Reimbursement: A specific amount of money limited to University of Arizona travelers to cover meals and incidentals while traveling on University business.  The rates are established by the State of Arizona and designated to reduce the administrative burden on travelers to eliminate collecting receipts per meal.  These rates are not designed to cover the entire cost of the meal, but to cover the difference between the costs of a meal of which the traveler might otherwise partake when not traveling for the University.
2. Duty Post: The primary place of business in which the individual reports to work on a daily basis.
3. Primary Destination: Travel may include multiple destinations. However, meal reimbursement is determined by the lodging location at which the employee will spend the night at the end of a travel day.
4. Accountable Plan: The University of Arizona reimburses employees under the IRS Accountable Plan in which expenses must have a business purpose, be adequately documented and submitted within a reasonable period of time.
5. Commercial Establishment: In the interest of this policy, a lodging establishment is considered ‘commercial’ in nature when used for the single purpose of a sleep/rest period. Private homes are considered non-commercial establishments, therefore, meals consumed in a private home are not eligible for meal reimbursement.
6. Long Term Travel: Temporary assignment to a duty post, in excess of thirty-five (35) miles from the individual’s residence and/or primary duty post for periods greater than thirty (30) days but less than 365 days.

Policy

General

1. University business travel status is determined when a traveler is required to be more than thirty-five (35) miles from the traveler’s residence and/or primary duty post.
2. Meal reimbursement rates are determined by the traveler’s primary destination, established by the State of Arizona Accounting Manual or travel within the continental United States.
3. Meal reimbursement rates for travel outside the continental United States are established by the United States Department of State Foreign meals/lodging.
4. Meal reimbursement rates for travel to Alaska, Hawaii, and the US Territories are established by the Defense Travel Management Office by adding the Local Meals rates to the Local Incidental rate.
5. Meal reimbursement will not be allowed for meals or other expenses incurred on the premises of a traveler's own residence, residence of a relative, friend, or other non-commercial establishment. 
6. When a traveler is reimbursed for actual costs of meals in accordance with these rules, reimbursement cannot exceed the meal reimbursement rate. If the traveler is reimbursed for actual costs at the department discretion, original itemized receipts for meals must be provided.
7. Traveler shall not be entitled to claim meal reimbursement for particular meals provided by a sponsor or host at no additional cost to the traveler.
8. Tips paid in connection with a meal are considered part of the cost of the meal.
9. Tips that exceed industry standards will not be reimbursed. The U.S. industry standard is between fifteen percent (15%) and twenty percent (20%) of the total bill.
10. Reimbursement for the purchase of alcoholic beverages, including tax and tip, related to the purchase are prohibited with University funds. 
11. Meal reimbursements for domestic cities and counties not listed in the State of Arizona Accounting Manual are limited to $41 per-day regardless of location.
12. Travelers requesting reimbursement for meals exceeding 90-days from the end of the travel event will be reimbursed as a Non-Qualified reimbursement and receive notification of taxable income under the University of Arizona 14.12 Accountable Plan.

Meals Involving an Overnight Stay

13. On the day of departure and the day of return, the traveler is entitled to seventy-five percent (75%) of the full-day meal reimbursement rate based on the traveler’s destination regardless of the time the traveler departed or returned.
14. Travel days involving an overnight stay, that are not the day of departure nor day of return, may be reimbursed for the Full-Day Meal reimbursement rate for the applicable date and location.
15. Reimbursement for meals involving an overnight stay in a commercial establishment are considered a qualified reimbursement and not taxable to the traveler, unless they do not meet the IRS Accountable Plan and the request for reimbursement exceeds 90-days from the end of travel status.
16. Traveler may not claim reimbursement for more than the full-day reimbursement rate in a single calendar day or twenty-four (24) consecutive hours.

Travel NOT Involving an Overnight Stay

17. Traveler qualifies for a single day meal reimbursement limit of $13, if their travel exceeds six (6) hours or more but fewer than twelve (12) consecutive hours.
18. Traveler qualifies for an extended day meal reimbursement limit of $20, if in travel status twelve (12) or more consecutive hours.
19. Single and extended day meal reimbursements limits apply regardless of destination and time of day the meals are purchased/consumed.
20. Meals reimbursed to a traveler without an overnight stay are taxable income to the traveler and will be reported on the employees W-2.

Long Term Travel

21. When on long term travel status, regular meal reimbursement rates do not apply.  Long term travel status applies to sabbatical leave but is not necessarily restricted to only sabbatical leave.
22. If the employee will be away from their duty post for more than 365 days this is not considered travel status. Once the traveler knows the duration will be greater than 365 days it becomes a relocation and is not considered University travel. Related expenses will be treated as moving and only expenses that qualify as moving expenses will be allowed.  (See Policy 9.14 for policy on relocation expenses).
23. Long Term travel status must be authorized by the department head with a letter of explanation detailing the lodging arrangements, requested/approved meal reimbursement and other pertinent information. The following guidelines apply:
    1. Travelers are allowed regular lodging and meal reimbursement rates for the appropriate season, not to exceed seven (7) days, while arranging for long term assignment if arrangements for accommodations were unable to be made prior to traveling.
    2. After the initial seven (7) day period, meals and lodging will be reimbursed as follows:
       1. Meal reimbursements will be made at the rate of fifty (50%) percent of the full-day amount allowed for the designated location.   
       2. Lodging will be reimbursed at the rate of twenty-five (25%) percent of the amount allowed for the destination. Lodging reimbursement includes all related costs such as electricity, gas, water and telephone. 
    3. Maximum reimbursable amounts must be determined in advance by the department, on a case by case basis. 
    4. If the traveler returns temporarily to his/her residence or primary duty post during the long term travel status, meal reimbursement will be reimbursed according to the meal reimbursement destination rate, if eligible. Mileage is not reimbursable if the traveler returns to his or her residence during long term subsistence travel. 
    5. Reimbursement associated with long term travel status in excess of one-year is taxable income to the employee and will be reported on the employee's W-2 form.
24. Sponsored Project Grant and Contract accounts: If the grant or contract provides specific meal reimbursement or per diem rates for foreign or domestic travel, these rates will be honored but must be supported by a copy of the relevant page of the grant or contract.

Procedures

1. A Travel Expense Report (TER) should be completed, claiming meal reimbursement costs to include a breakdown of daily expenses. Full-day reimbursement may be shown on the report in a daily lump sum amount.  Meals provided by a sponsor/host should be identified on the TER and removed from the meal reimbursement requested amount, as they represent no cost to the traveler. 
2. Full day, single day, and extended day meal reimbursements are to be reduced when a meal is provided by the host or sponsor, including business meetings/entertainment meals, depending on the meal provided as follows:
   1. Meal provided between 12:01 a.m. and 10:00 a.m. is deemed to be breakfast and the amount allowed in the destination location for breakfast should be deducted.
   2. Meals provided between 10:01 a.m. and 2:00 pm is deemed as lunch and amount allowed in destination should be deducted.
   3. Meals provided between 2:01 p.m. and 12:00 midnight is deemed to be dinner and the amount allowed by destination for the day should be deducted.
3. Meal receipts should be reviewed for tips exceeding industry standards (between fifteen (15%) – twenty (20%) percent of the total bill).  Tips exceeding the industry standards should be recalculated and the reimbursement reduced accordingly.   
4. A receipt containing alcohol, tip and tax should be recalculated using the Receipt ReCalculator and the adjustment should be clearly documented for reimbursement. 
5. International meal reimbursement rates should be calculated from the US Department of State utilizing the final destination country in which the traveler will be lodging and conducting University business.  When the travel event consists of multiple destinations, the reimbursement will include multiple meal reimbursement rates to coincide with each destination, dependent on lodging location. 
6. Receipts for meals in foreign currency require US Dollar currency conversion as reimbursement will be provided in US Dollars.  Best practice is to utilize an on-line currency converter such as Oanda and document the conversion amount on each invoice and/or receipt.  Use the receipt date to ensure the correct conversion is obtained for the traveler.
7. A Disbursement Voucher should be initiated in UAccess Financials for reimbursement of meals and other related travel expenses. A copy of the completed Travel Expense Report (TER) along with any supporting documentation (except security sensitive information) should be attached in the Notes/Attachment Tab of the Disbursement Voucher. 
8. The original signed Travel Expense Report (TER), Disbursement Voucher Cover Sheet and any original itemized receipts, if applicable, along with any additional supporting documentation to substantiate the travel event should be submitted to FSO Accounts Payable.
9. Taxable reimbursements for meal reimbursements without an overnight stay will be processed by Accounts Payable and the employee will receive an email notification regarding the taxability.
10. Questions regarding the reimbursement process should be directed to FSO Accounts Payable at 520-621-9097 or accts_pay@fso.arizona.edu
11. Questions regarding travel funding sources should be directed to the departmental FSO Fund Accountant or to Sponsored Projects & Contracting Services (SPCS) for SPCS accounts.

Frequently Asked Questions

Should the business office provide the traveler with the breakdown of breakfast, lunch and dinner to provide guidance on what they may expense for the day per meal?

Yes, when a traveler is entitled to a full day reimbursement, the amount expended for any particular meal is left to the discretion of the individual, but the total for all meals in one day shall not exceed the maximum reimbursement limit. It is a best practice to ensure travelers are aware of meal reimbursement amounts for the destination of travel.

Is a snack/peanuts provided on an airplane considered a meal?

No, a light snack consisting of peanuts, cookies, candies, coffee, tea, soft drinks, ice cream or similar refreshments provided by a host does not constitute a meal.

Is a continental breakfast served at a conference or by the lodging establishment considered a meal?

Yes, a continental breakfast served at no cost to the traveler constitutes a meal whether or not it contains protein and no reimbursement for the breakfast will be allowed.  

Am I required to submit meal receipts when claiming meal reimbursement?

No, receipts are not required when claiming meal reimbursement when lodging is in a commercial establishment.  However, an original itemized receipt is required for a business meeting expense in which, the employee paid on behalf of other individual(s).  For a business meeting with University business purpose, meal reimbursement rates would not be utilized and actual costs reimbursed.

May a traveler claim meal reimbursement without an overnight stay in a commercial establishment?

Yes, without an overnight stay a traveler may claim a maximum of $13 for a single day meal reimbursement, if travel exceeds six (6) hours.  When the travel for a single day exceeds 12 hours the traveler may claim a maximum of $20 for the extended day meal reimbursement based on current state rates.

How should I calculate meal reimbursements on departure and return days of travel?

University travelers are allowed 75% of the full day meal and incidental (M&IE) rate regardless of departure or return time based on the rate determined by the destination of the traveler. 

How should I calculate meal reimbursement when a meal was provided at a conference?

Meals provided while attending a conference or on travel days must be subtracted from the traveler’s full-day meal reimbursement.

Scenario 1:
Traveler departs to San Diego, CA (M&IE = $54) on Monday for a two-day conference and no meals are provided at the conference or on travel days, Traveler returns to Tucson on Thursday late afternoon (M&IE = $49). 

Day	Amount	Description:
Monday	$40.50	75% San Diego destination
Tuesday	$54.00	Full-Day reimbursement
Wednesday	$54.00	Full-Day reimbursement
Thursday	$36.75	75% Tucson destination

Scenario 2:
Traveler departs to Boston, MA (M&IE = $59) on Tuesday for a two-day conference and a networking dinner provided on the day of arrival.  Breakfast and lunch are provided during the conference and breakfast is provided on day of return on Friday to Tucson (M&IE = $49). 

Day	Amount	Description:
Tuesday	$12.25	75% Boston destination ($44.25) less dinner meal ($32)
Wednesday	$32.00	Dinner reimbursement
Thursday	$32.00	Dinner reimbursement
Friday	$26.75	75% Tucson destination ($36.75) less breakfast provided ($10.00)

How do I determine the value of meals provided for Alaska, Hawaii and out-of-country locations or if the location is not listed in the index tables?

When a location is not listed in the rate index tables the rate designated as ‘Other’ should be utilized.  To breakdown partial day meal reimbursements, the following percentages of the full-day meal reimbursement rate should be utilized:

Breakfast          20%
Lunch               25%
Dinner               55% 

If I am unable to locate a specific rate for a domestic city destination, what rate should I use?

When neither the specific city nor county is listed, use the default rate indicated at the beginning of the reimbursement rate table.

If I am on travel status and the host is providing meals that do not meet my special dietary requirements, what should I do?

It is the traveler’s responsibility to make necessary arrangements with the host for special dietary requirements.  If the traveler special dietary needs request is denied by the host, the traveler should receive a meal reimbursement for that meal.  The traveler is required to provide the details indicating when and to whom the request was made, who denied the request and the reason for the denial.  If the host is able to accommodate the dietary requirements, the meal reimbursement for the full-day rate should be reduced.

What should I do if the receipt contains expenses to be paid through another entity?

The receipt should be recalculated and clearly documented as to what is the University’s portion of the expenditures and the other entity’s portion.  A copy of the receipt containing expenses that will be covered by another entity should be provided to the other entity and the original should be forwarded with the request for reimbursement to FSO-Operations. 

What should I do when a meal reimbursement contains a business meeting expense?

When conducting business meetings while on travel status, please refer to 9.10 Requisitions/Reimbursement policy for the required documentation.  In addition, the meal reimbursement for the day of the business meeting should reduce the full-day, single day or extended day reimbursement rate and be documented on the Travel Expense Report. 

Can a traveler utilizing a non-commercial establishment for business, receive the University/State Meal Reimbursement rate?   

No, when a traveler is staying with a friend, family or other non-commercial establishment Meal Reimbursement rates do not apply. The traveler may supply original itemized receipts for the actual cost of meal(s) and receive reimbursement, not to exceed the meal reimbursement rate.

Related Information

Travel Training - UAccess Learning 

State of Arizona Accounting Manual - Reimbursement Rates

Defense Travel Management Office (Reimbursement rates for Alaska and Hawaii)

International Travel Reimbursement rates

University of Arizona Sabbatical Leave Policy

IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses