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 beginning January 1, 2023 has been increased to 65.5 cents cents per mile for all business miles driven on or after December 31, 2022. You can review the IRS Announcement 2022-13 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 is also 65.5 cents per mile based on the state's Comprehensive Travel Regulations.