St. Olaf College Cellular Phone, PDA, and Internet Service Procedures
Title: Cellular Phone, PDA, and Internet Service Procedures
Effective Date: 06-01-2009
Issuing Authority: Vice President and Treasurer
Contact: Alan Norton at nortona@stolaf.edu or 507-786-3018
Last Updated: 03-06-2013
Purpose of Procedures
The purpose of these procedures and guidelines is to provide consistent guidance for St. Olaf College employees to comply with Internal Revenue Service (IRS) regulations.
Reason for the Procedures
The IRS considers employer provided cell devices to be “listed property” for the purposes of tax treatment (section 280F (d)(4)(A)(v)). Section 274(d)(4) of the IRS code describes the steps necessary to document such business use of listed property and includes (a) the amount of the expense, (b) the time and place of the call, and (c) the business purpose of the call.
Providing a taxable allowance eliminates these onerous record-keeping requirements for both the employee and the employer. Another benefit of having a taxable allowance is the employee owns the cellular device and may use the device for both personal and business usage. Employees may also use the taxable allowance to obtain the cellular service they desire and may freely use it to purchase an individual cellular plan or a so-called “family” plan.
Procedures
As a result of the IRS requirements, effective June 1, 2009, St. Olaf College will transition to no longer owning cellular devices or contracting with cellular providers for monthly service, except in a few rare cases discussed later in the procedures. Instead, those employees who have a documented business need for a cellular device will receive a taxable allowance for such service as described below. Employees may not use the college purchase card to pay for cellular device charges. All contracts for service must be taken out in the name of the employee receiving the allowance and may not be taken out in the name of St. Olaf College. College funds may not be used for home phone lines or home Internet services (including DSL and cable modem).
All employees with a business-related need for a cellular phone or PDA allowance should complete the "Cellular Phone / PDA Allowance Request Form.” The employee’s direct supervisor signs the Request Form and sends it to the Treasurer’s Office. The Treasurer reviews the requests to assure a consistent application of these procedures throughout the College. If the request is approved, then the original, signed form is sent to the Payroll Office. Once received and processed by the Payroll Office, a taxable monthly allowance will be added to the employee’s first paycheck of each month. This allowance amount will be charged to the appropriate departmental operating budget as indicated on the eligibility form. The Vice President/Treasurer of St. Olaf College has the going responsibility for interpreting and administering the St. Olaf College Cellular Phone and PDA Procedures.
Cellular Phone/PDA Service Allowance
The responsibilities of an employee must fall under one the following categories to qualify for a cellular phone/PDA service allowance:
- More than 50 percent of work is conducted away from the campus office and/or there is frequently an urgent need to reach the employee to transact timely College business-related communications.
- Monthly usage for business purposes is consistently 50 percent or more of total contract minutes.
The amount of monthly allowance is based upon a typical contract necessary to meet business-related needs for either voice services or, in the case of a PDA, for voice and data services. The College offers three levels of taxable monthly allowances for voice plans and two levels of allowances for PDA plans:
Estimated Monthly Business Usage Level |
Voice Plan Allowance |
Voice and Data |
Low Usage (up to 200 minutes) |
$20 per month |
n/a |
Average Usage (200-500 minutes) |
$50 per month |
$85 per month |
High Usage (500+ minutes) |
$75 per month |
$110 per month |
Allowances are not issued to student workers, contract employees, part-time or temporary personnel, consultants, or other employees that do not have a compelling use for the technology. A significant daily commute from home to work is not a justification for a cellular device allowance. The College will not provide a regular monthly allowance forde minimismonthly use – see below: “Reimbursement for Business Calls on a Personal Cellular Device.”
No additional reimbursement will be provided to those receiving a monthly allowance, even if the monthly charges to the employee exceed the allowance amount. However, allowances can be changed at any time should circumstances or needs change. All requests for a change in allowance must be made by the supervisor in writing using the “Cellular Phone/PDA Allowance and Equipment Request Form” with the original signed form sent to the Treasurer’s Office.
Reminder: appropriate payroll taxes on the allowance amount will be withheld from the paycheck, and the amount of the allowance will be included on the individual’s year-end W-2. The allowance does not constitute an increase to base pay, and will not be included in the calculation of percentage increases to base pay due to annual raises, job upgrades, benefits based on a percentage of salary, etc. The allowance will continue unless the Payroll Office is notified in writing either by the employee, or the supervisor that the allowance is to cease.
Cellular/PDA Equipment Allowance
The College will also provide employees with a taxable equipment allowance towards the initial purchase of a new cellular phone or PDA, and for the replacement of a cellular phone or PDA (where the replacement may occur no more frequently than once every 3 years). In order to receive an equipment allowance the employee must submit proof in the form of a paid receipt showing the purchase of the new cellular phone or PDA, with its cost clearly indicated. For cellular phones the amount of the equipment allowance will be the lesser of the actual cost of the new cellular phone or $50. For PDAs the amount of the equipment allowance will be the lesser of the actual cost of the new PDA or $300. Equipment allowances must be requested using the “Cellular Phone/PDA Allowance and Equipment Request Form” with the original form submitted to the Treasurer’s Office for approval. Pending approval, cellular devices currently owned by the College will be transferred to the employee for their continued use.
Reimbursement for Business Calls on a Personal Cellular Device
If an employee is not approved for a monthly allowance but incurs expense for individual telephone calls it is also possible to be reimbursed for actual usage. In order to be reimbursed in this manner, employees should submit an expense report through their department to the Accounts Payable department with a copy of the telephone bill clearly showing which calls were business related and describing the specific purpose for each of those calls.
Cancellations/Changes to Cellular Contracts
The College reserves the right to change or terminate these procedures regarding allowances for cell phone or PDA service and equipment.
If, prior to the end of a cell phone/PDA contract, as a result of a personal decision by the employee, employee misconduct, or misuse of the phone results in the need to change or end the cell phone/PDA contract, the employee will bear the cost of any associated contract termination fees.
If, prior to the end of the cell phone/PDA contract period, a College decision is made (unrelated to employee misconduct) which results in the need to change or end the cell phone/PDA contract, the College will bear the cost of any associated contract termination fees.
Special Procedures for College Owned Cellular Phones and PDAs
In some situations, it may be necessary or advantageous for the College to own and pay the monthly service charges for cellular devices. Examples include: (a) an on-call shared department phone for multiple individuals to use that is not assigned to a specific individual and personal use is prohibited; (b) phones used by individuals in a department for communication if it is determined that the cellular device provides a more reliable and cost effective solution over a two-way radio and the phone is not taken home or used for personal calls. The Treasurer will consider requests for College owned devices and contracted services.
Appropriate Use of Cellular Devices Used to Conduct St. Olaf College Business:
It is imperative that cellular devices used to conduct St. Olaf College business be used appropriately, responsibility, and ethically. The following must be observed:
- St. Olaf College employees are prohibited from storing confidential data on a cellular device. Employees must follow the data security policy and data elements that are subject to data privacy rules as posted on the IIT Web site.
- St. Olaf College employees are prohibited from operating a motor vehicle while using a cellular device to conduct St. Olaf Business.
- No employee is to use a college-owned cellular device for the purpose of illegal transactions, harassment, or obscene behavior, in accordance with other existing employee policies.
