Taxability of International Travel with Personal Use

Reimbursements for international travel that have both a business and a personal component may be subject to tax (IRS Publication: Travel Outside the United States). The traveler's international flight cost is considered entirely for business and is nontaxable, if the traveler meets at least one of the following four exceptions: 

1. No substantial control. The trip is considered entirely for business if the traveler did not have substantial control over arranging the trip. Control over the timing of the trip does not by itself mean that there is substantial control over arranging the trip. 
2. Outside the U.S. no more than a week. The trip is considered entirely for busienss if the traveler is outside the U.S. for a week or less, combining business and nonbusiness activities. One week means 7 consecutive days. In counting the days, do not count the day the traveler leaves the U.S., but count the day when the traveler returns to the U.S.
3. Less than 25% of time is spent on personal activities. The trip is considered entirely for business if the traveler:
   1. Is outside of the U.S. for more than a week; and
   2. Spent less than 25% of the total time outside of the U.S. on nonbusiness activities.
4. Vacation is not a major consideration. The trip is considered entirely for business if the traveler can establish that personal vacation wasn't a major consideration, even if there is a substantial control over arranging the trip. 

If none of the four exceptions listed above applies, then an employee's international travel is not primarily for business. Only the business portion of the cost of getting to and from the destination is nontaxable. 

For more detailed information and examples of international travel with a personal component, please visit the CSU Travel policy on Taxability of International Travel with Personal Use.