Pittsburg State University
CLOTHING PURCHASED FOR EMPLOYEES:
FUND & TAXABILITY ISSUES
MAY 2010
PURPOSE OF POLICY
Provide guidance on the taxability of clothing
purchased for employee wear.
 Provide information on what funding sources
may be used for clothing purchases.
 Apply consistently across campus.
 Ensure compliance with IRS regulations.

IRS PUBLICATION 15-B: FRINGE BENEFITS

A fringe benefit is a form of pay for the
performance of services.
 Examples:
 Employer-Provided
Vehicle or Transportation
 Athletic
Facility
 Educational Assistance
 Employer-Provided Lodging

Any fringe benefit provided by the employer is
taxable and must be included in the recipient's
pay unless the law specifically excludes it.
IRS PUBLICATION 15-B: FRINGE BENEFITS

Fringe benefits that are excluded from taxation
include:
 De
minimis (minimal) benefits (cost and frequency)
 Working condition benefits
IRS PUBLICATION 15-B: FRINGE BENEFITS

Working Condition Benefits are not taxable to
the employee.
 Applies
to property and services provided to an
employee to perform his or her job.
 Applies to the extent that the employee could
deduct the cost of the property or service as a
business expense or depreciation expense if he or
she had paid for it.
IRS PUBLICATION 529 - DEDUCTIONS
Individual can deduct only unreimbursed
employee expenses that are ordinary and
necessary.
 An expense is ordinary if it is common and
accepted in your trade, business, or profession.
 An expense is necessary if it is helpful to your
business.
 An expense does not have to be required to be
considered necessary.

IRS PUBLICATION 529 - DEDUCTIONS

Individual may be able to deduct the following
as unreimbursed employee expense:
 Work
clothes and uniforms if required and not
suitable for everyday use.
 “It is not enough that you wear distinctive clothing.
The clothing must be specifically required by your
employer. Nor is it enough that you do not, in fact,
wear your work clothes away from work. The
clothing must not be suitable for taking the place of
your regular clothing.”
STATE OF KANSAS - GIFTS

Kansas law prohibits state employees from
accepting or requesting meals, gifts,
entertainment and travel with a few exceptions:
State employees are prohibited from soliciting or
accepting any gift because of his/her official position.
 Exceptions:

 Gifts
valued at less then $40 given at ceremonies or public
functions when attended in your capacity as a state employee.
 Gifts from relatives or personal friends.
 Gifts accepted on behalf of the state that become the
property of the state.
(Source: SOK Governmental Ethics Commission – Conflict of Interest Guidelines for State Employees)
TYPES OF CLOTHING PURCHASED
Uniform
 Business attire
 Protective clothing
 Other clothing

TYPES OF CLOTHING PURCHASED- UNIFORM
Required by PSU to be worn in the performance
of assigned duties.
 Not suitable for taking the place of regular
clothing.
 Remains the property of PSU.

Departments with approved Uniforms:
• University Police (police officers only)
• Student Health Center (medical staff only)
TYPES OF CLOTHING PURCHASED– BUSINESS ATTIRE






A shirt is the only item of clothing that qualifies as Business Attire.
Makes the employee easily identifiable as a PSU employee who is serving in
an official capacity.
“Pittsburg State University”, “PSU” or the PSU logo and the name of the
College, Department or group printed or monogrammed where it is clearly
visible.
Worn at work and/or at events specified by the Dean, Director or Chair and
only when serving in an official capacity for PSU.
Cannot be worn for everyday wear.
Remains the property of PSU until the purchase value is depreciated.
Department has a written policy covering these items.
TYPES OF CLOTHING PURCHASED – PROTECTIVE CLOTHING
Worn over or in place of regular clothing to
protect the employee from damage or abnormal
soiling, or to maintain a sanitary environment.
 May include serving aprons, laboratory coats
and shop coats.

TYPES OF CLOTHING PURCHASED – OTHER CLOTHING

Any article of clothing that does not meet the
definition of Uniform, Business Attire or
Protective Clothing.
FUNDING – UNIFORMS & PROTECTIVE CLOTHING

May use General Use funding (OOE).
FUNDING – BUSINESS ATTIRE

May be paid from
Restricted Fee accounts
 Foundation accounts
 Local accounts

If paid from a Restricted Fee account supported by
student fees, program must allow the purchase of
clothing.
 If purchased for a specific event, the event must
be recognized on the shirt (e.g. Pitt Cares, RHA,
Rumble in the Jungle, Grad Finale, SAC).

FUNDING – OTHER CLOTHING

May be purchased by the department but ONLY
from Foundation accounts.
FUNDING - MISCELLANEOUS





If money is collected from individuals for the cost of
clothing, deposit funds in a restricted fee account.
Sales tax must be collected.
Department is responsible for depositing money
collected from individuals with the Cashier’s Office.
A list of the individuals, as well as proof of deposit(s)
must accompany the request for payment to the clothing
vendor.
No advancement of PSU funds may be used to purchase
clothing when it is being paid for by an individual.
TAXABILITY
Uniforms, Business Attire & Protective Clothing:
NOT A TAXABLE FRINGE BENEFIT TO THE
EMPLOYEE
 Other Clothing: TAXABLE FRINGE BENEFIT TO
THE EMPLOYEE UNLESS THE VALUE OF THE
CLOTHING IS DE MINIMIS ($15 or less per item)

Note: Items that cost $15 or less are not
de minimis if provided to the employee on a
regular basis.
TAXABILITY

If the clothing is a taxable fringe benefit to the
employee, the cost of the item adds to the following:







Added to Federal Taxable Gross (Employee)
Added to State Taxable Gross (Employee)
Added to Social Security & Medicare Gross (Employee &
Employer)
Added to KPERS Gross, including Buyback (Employee &
Employer)
Added to Unemployment Compensation Insurance Gross
(Employer)
Added to Workers Compensation Insurance Gross
(Employer)
Added to Death & Disability Gross (Employer)
TAXABILITY

Taxability determination must be made if a
department wants to purchase an item of Other
Clothing as Business Attire.
Determination of Taxability Form – Clothing Purchased for
Employee(s)
AUTHORITY & RESPONSIBILITY
Dean, Director or Chair determines the
appropriateness of the clothing expenditure.
 Decision Factors:

Cost
 Budget
 Business Use
 Public Contact
 Personal Safety
 Consistency


Approval of Dean, Director or Chair is required on
the invoice.
AUTHORITY & RESPONSIBILITY

If Uniforms or Business Attire are purchased for employees,
a departmental policy should include the following:




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
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
List of employees and/or positions eligible for Uniforms or
Business Attire.
Frequency of purchase.
Dollar limit of clothing item, if applicable.
Specific time/events when clothing is to be worn.
Statement that the clothing is to be worn only while performing
official PSU duties.
Disposition of clothing item when employee leaves employment.
Depreciation time frame for clothing.
The policy should be communicated to the employees who
are provided with the Uniforms or Business Attire.
PROCEDURES FOR PURCHASE & PAYMENT
1.
2.
Department purchases the Uniforms, Business Attire (Shirts), Protective
Clothing or Other Clothing .
Initiate payment using a Department Purchase Request (DPR) or the PSU
Business Procurement Card (BPC):




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Note on the invoice or attach a paper listing the names of the employees, their PSU
ID#’s and the clothing items attributed to each.
Include proof of deposit if money collected from individuals for the cost of clothing
was deposited in a restricted account.
Approval for the use of funding by the authorized signature and approval for the
purchase of clothing are required. If the authorized signature is a Director, Chair or
higher, the authorized signature can approve the purchase as well as the use of the
funding. It the authorized signature is lower than a Director or Chair, an approval
signature from the appropriate Director, Chair or higher is also required on the
invoice.
Submit the invoice with required employee information and approvals with the
DPR or BPC log.
Note that departmental adherence to the clothing policy is implied by the
signature approval provided on the payment request.
PROCEDURES FOR PURCHASE & PAYMENT – OTHER CLOTHING
 Department
will follow the procedures previously noted.
 The Business Office will send the list of employees who receive items
of Other Clothing that cost more than $15 per item to HRS to be
included as a taxable fringe benefit to the employee(s) receiving the
items. Note that Other Clothing can only be paid from Foundation
funds.
 The department may request a review to determine if the Other
Clothing items qualify as Business Attire (not a taxable fringe benefit).
To initiate a review, PRIOR TO SENDING the payment request to the
Business Office, the department completes a “Determination of
Taxability Form” and submits to HRS with the DPR/BPC log, invoice
and the information previously noted. Upon completion of the, review,
HRS will notify the department of the decision and forward all
documents to the Business Office for payment.
AUDITING

Periodic audits will be conducted by PSU’s
Internal Auditor to ensure compliance.
MISCELLANEOUS
This policy does not apply to clothing
purchased for hospitality, promotional items,
gifts, etc.
 Departments that purchase clothing for these
reasons must include on the DPR or BPC log
the reason for the purchase (e.g. “Shirt will be
used as a door prize at the Classified Staff
Recognition Picnic on Thursday, June 3, 2010).

FOR MORE INFORMATION

Fund Issues:
 Geri
Krumsick (gekrumsi@pittstate.edu or x. 4150)
 Christina Davis (cdavis@pittstate.edu or x. 4159)
 Kim Wilson (kwilso@pittstate.edu or x. 4168)

Taxability Issues:
 Michele
Sexton (msexton@pittstate.edu or x. 4188)
 Diane Letner (dletner@pittstate.edu or x. 4096)
QUESTIONS?????