You may already know this, but just in case you don't, this may save you some money.
Hypothetical situation:
Suppose I drive 10,000 miles in one quarter, 5,000 miles in Idaho, and 5,000 miles in Wyoming, and suppose that I have enough fuel capacity to buy all the fuel in one state or the other.
Scenario #1: Fuel in Wyoming is $2.95 per gallon, and fuel in Idaho is $3.00 per gallon.
I got 5 miles per gallon, and therefore burned 1,000 gallons in each state, or 2,000 gallons total. Now let's say that I bought all of my fuel in Wyoming, because it is cheaper. So, I spent $2.95 per gallon and purchased 2,000 gallons, for a total of $5,900 dollars. Then, when I file IFTA, Idaho charges me for the tax on 1,000 gallons at $0.32 per gallon, or $320. Now we will add that to the price paid at the pump of $5,900, for a total of $6,220. Wyoming however gives me a credit because I bought more than I burned there. Wyoming's tax rate is $0.24 per gallon, I bought 2,000 gallons, but only burned 1,000 gallons, so I get a refund of $240. Now we subtract that from the total of $6,200, for a total fuel cost for the quarter, including state tax, of $5,960.
Scenario # 2: Exactly the same as #1, except I buy all my fuel in Idaho instead of Wyoming. So I bought 2,000 gallons @ $3.00 per gallon, for a total pump price of $6,000. Wyoming charges me for 1,000 gallons of state tax @$0.24 per gallon, or $240. Add that to what I already have paid at the pump, for a total of $6,240. Now Idaho gives me a refund on the extra fuel that I bought there @$0.32 per gallon on 1,000 gallons, or $320. Subtract that from $6,240, and the total that I spent on fuel for the quarter, including state tax, is $5,920.
So, I saved $40 dollars in total fuel cost by purchasing the more expensive fuel at the pump.
Again, you may already know all of this, but the lesson is to always subtract the state tax from the pump price when comparing fuel prices. In my scenario the net cost of fuel in Idaho was $2.68, and in Wyoming was $2.71.
3rd Decimal on Fuel Quantity Missing on Fuel Reports?
Discussion in 'Ask An Owner Operator' started by PE_T, Apr 18, 2019.
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