A "no-additional-cost" service includes only those services in the major line of business in which the employee is employed.

Question

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A "no-additional-cost" service is a fringe benefit that employers can offer to employees without creating a taxable event. However, this benefit is limited to services that are within the major line of business of the employer. For example, an airline company offering free flights to its employees would be considered a "no-additional-cost" service because it falls within the company's main business of providing transportation services. However, offering free meals at a company-owned restaurant would not be considered a "no-additional-cost" service if the company's main business is not in the food industry.

A "No-Additional-Cost" Service Includes Only Those Services in the Major