The purpose of this policy is to provide guidance on the taxability of clothing purchases for employees, for consistent application across campus to ensure that PSU will be compliant with IRS regulations. This policy also provides information on what funding sources may be used to purchase different types of clothing.
When purchasing clothing, the names of the employees who are receiving the clothing item must be included with the invoice with the item(s) of clothing attributed to each.
Currently, shirts are the only clothing items approved as Business Attire. A department may submit a completed Determination of Taxability Form - Clothing Purchased for Employee(s) to HRS if it desires a determination on taxability for Other Clothing. Other Clothing that is determined to meet the definition of Business Attire will not be a taxable fringe benefit to the employee and may be paid from funds available for the purchase of Business Attire.