Gallego, Davids Call on IRS to Increase Gas Mileage Deductions for Small Businesses
WASHINGTON, DC – Rep. Ruben Gallego (AZ-07) and Rep. Sharice Davids (KS-03), along with 16 other members of Congress, sent a letter to Internal Revenue Service Commissioner Charles Rettig requesting the IRS increase the 2022 optional standard mileage rate used to deduct the cost of operating an automobile for business purposes. The lawmakers cite the rise in gas prices that have occurred in the months since the revenue service issued the 2022 rates as a necessary reason to increase the mileage deduction rate.
Click here to read the letter.
“Small business owners and rideshare drivers should not bear the brunt of rising gas prices caused by oil company greed and Putin’s war in Ukraine,” said Rep. Ruben Gallego. “While Democrats in Congress work on solutions to ease the impact of these rising prices, we are also calling on the IRS to take executive action. We are not reinventing the wheel with this request—the IRS has adjusted the rate in the past. It is our hope they do right by small businesses and make the change now.”
“Kansans are getting squeezed by rising gas prices—that includes small business owners. This is another commonsense step we can take to keep money in people’s pockets amid extraordinary circumstances,” said Rep. Sharice Davids. “We’re still working to fight long-term inflation and find energy solutions, but the fact is, Kansans need relief from rising prices right now.”
In December 2021, the IRS issued the 2022 optional standard mileage rate. In the proceeding months, the average cost of a gallon of gas has increased by nearly a dollar per gallon. The letter asks the IRS to adjust the rate at an amount proportional to the gas price increase.
The revenue service has made similar adjustments in the past. The letter reads: “As you know, there is ample historical precedent for the IRS to increase the standard mileage rate in response to high gas prices. In June 2011, the IRS increased the standard mileage rate by 4.5 cents per mile for miles driven after July 1, 2011 and stated that it was doing so, ‘in recognition of recent gasoline price increases.’ In 2022, consumers and businesses have seen gas prices grow even higher than they did in 2011 when the IRS last took this action. As such, we believe it is appropriate for the IRS to move to ensure that its standard mileage rate deduction grows proportionately to increases in prices, and that the adjustment be made retroactive to March 1.”
The letter builds on previous efforts by Rep. Gallego to provide hardworking Arizonans needed relief at the pump to combat the rise in gas prices. In April, Rep. Gallego called on Arizona Governor Doug Ducey to use a portion of the state’s American Rescue Plan funds to give Arizonans direct relief from rising gas prices.