That depends. On your federal tax return, reimbursements of work-related expenses are not taxable if the employer uses an accountable plan. An accountable plan means that you are only reimbursed for legitimate business expenses that you prove with receipts, a mileage diary, or other acceptable proof. (You must prove both the mileage you drove, and that it was for a legitimate business purpose. The business has the burden of proof and has a lot of leeway in creating reimbursement forms for employees to use that will capture the required information.)
If the employer has a non-accountable plan, and does not require that you prove the purpose and amount of the expense, then the reimbursement is taxable income and must be included in your W-2 box 1 wages. You can't deduct mileage as an expense because that deduction was eliminated by the 2018 tax cut law.
Normally, the state would treat the mileage reimbursement the same as the IRS, but if Prop 22 modified that (making all mileage tax-free for example) that would be reflected on your state tax return but NOT your federal return. The IRS follows federal law as to what is and is not taxable income.
