PURDUE UNIVERSITY
OFFICE OF THE BUSINESS MANAGER AND ASSISTANT TREASURER
WEST LAFAYETTE, INDIANA 47907
June 20, 1956
To: Deans, Directors and Heads of Schools, Divisions, Departments and Offices
Re: BUSINESS OFFICE MEMORANDUM NO. 51
(Superseded by Business Memorandum 72 dated 19 June 1961)
Employee Meals or Lodging Furnished by Purdue University
This memorandum is for the purpose of clarifying the position of the University with respect to Federal Withholding Tax requirements in connection with employee meals and lodging.
Section 119 of the Internal Revenue Code of 1954 states as follows:
"There shall be excluded from gross income of any employee the value of any meals or lodging furnished to him by his employer for the convenience of the employer, but only if
- in the case of meals, the meals are furnished on the business premises of the employer, or
- in the case of the lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment. "
Effective 1 July 1956, employees in positions listed on the attached sheet will be required to accept lodging on the University premises and/or will be required to eat some or all of their meals on said premises.
The value of meals or lodging in such positions will not be considered compensatory in nature, and under Section 119, as quoted above, will not be subject to Federal Withholding Tax. Likewise, the value of such meals or lodging will not be included in the computation of the following.
- Vacation pay
- Sick-leave pay
- Leave of absence pay
- Group insurance entitlement
- TIAA contributions
Under the requirements of Federal and State laws, the value of meals or lodging furnished by the University will be included in the computation of contributions to Social Security and to The Public Employees Retirement Fund and in the computation of payments to employees for occupational injury or disease.
L. J. Freehafer
Business Manager and
Assistant Treasurer
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