For fleet management, calculating IFTA taxes is a tedious but necessary part of the job. The good news is that with the FieldLogix IFTA-only plan, determining the mileage driven in each state and fuel expenses for each vehicle can be automatically uploaded into a fleet’s tax software. Therefore, the proper IFTA paperwork can quickly be produced.
Since truckers typically operate across state lines they often need to calculate their usage in various locations. IFTA fleet tracking reports are a good way to do this as not only would it report your GPS location but it would also report the exact time for each position report. Ideally, you could automate this process with reporting transmitted in real-time as you go.
Additionally, many fleets are leaving money on the table due to unclaimed tax rebates. Tax rebates are basically found money, which is always a good thing. For example, if a truck driver is driving around the warehouse, or fuel is being used to power an auxiliary power unit (APU) for in-cab heating, then that truck is not tearing up a state’s roads for that portion of the fuel budget. Several states recognize this reasoning and offer tax credits for non-highway vehicle use, however, these tax credits and the necessary supporting documentation vary state by state.
To maximize these rebates, a company is advised to use a tax consulting firm with expertise in truck fleet taxes. Fleet management needs to sign a form authorizing FieldLogix and any fuel card providers to release the required data to the tax consultant.
What is IFTA?
IFTA stands for Interstate Fuel Tax Agreement. IFTA is an agreement among 48 US states (except Alaska and Hawaii) and Canadian provinces (except Nunavut and Yukon) to simplify the reporting of fuel used by motor carriers operating in more than one jurisdiction. An operating motor carrier with an IFTA license must file a quarterly fuel tax report and must display one decal per qualifying vehicle it operates under the IFTA license. This fuel tax report is used to calculate the net tax or refund due and to redistribute taxes from collecting states to states that it is due.
The fundamental purpose of the IFTA tax is to allocate taxes according to where the actual fleet vehicle was driving, not where the fleet operator or vehicles are based. For example, if a fleet of heavy trucks crosses roads in several states, then a portion of the fuel tax the fleet operator pays in his state needs to go to the other states to compensate them for road wear and tear. Therefore, fleet operators need to use a GPS fleet tracking system to record the exact mileage each fleet vehicle travels in each state. Then fleet management can accurately calculate the amount of fuel taxes owed in each state. The various states are then obligated to share these tax revenues based on the mileage traveled in different jurisdictions.
This tax is required for motor vehicles used, designed, or maintained for transportation of persons or property and:
* Has two axles and a gross vehicle weight rating or registered gross vehicle weight in excess of 26,000 pounds, and/or
* Has three or more axles regardless of weight, and/or
* Is used in combination, when the weight of such combination exceeds 26,000 pounds gross vehicle or registered gross vehicle weight.