Page 36 - The EDGE Fall 2022

Fringe Benefits— Are They Gifts or Taxable?

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retirement planning services, and something organization, so for a school district it must be
related to improving working conditions. tied to educating students. The state does not
have a stated de minimis value amount, so $200
Huie explained the Gift Clause in the Arizona may be OK under the Gift Clause, but would be
Constitution, which basically says the expenditure taxable according to the IRS, Huie said.
of public funds must be for a public purpose and
the expenditure “does not exceed the worth of the White provided some examples of food and meal
direct benefits enjoyed by the public body.” benefits. They include meals provided by the
While the IRS is specific with the $100 limit, the district’s Food Service Department for employees,
state Gift Clause is broad. “You need to determine food provided for staff at board meetings and
which one applies,” she said. “The Gift Clause training sessions, holiday meals and celebrations
could vary depending on size of the district.” and special events.

To avoid a violation of the Gift Clause, the “Travel reimbursements used to be one of the few
expenditure must support the goal of the ways a district could provide food to employees,”

For you

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36 THE EDGE FALL 2022