IFTA, How?

OK I think I have the basic idea about IFTA, I tried reading the IFTA reporting manual linked here and....well I hate reading federal documents as they repeat a lot and seem to use a lot of doubletalk. So once again I respectfully request your assistance in explaining in a manner normal people can understand how this works.

What I think I know...

When you fuel up, pump price isn't really the important thing, you need to look at how much tax that state is taking. ie. state one has fuel at $3.80/gal but they charge $.35/gal fuel tax. State two has fuel at $3.70/gal but they charge $.20/gal in tax. So while state two is cheaper at the pump, $3.80 vs $3.70, once you take out the tax state one is actually cheaper at $3.45/gal after tax vs State two at $3.50/gal after tax.

So you pay IFTA taxes based on how many miles you run in a state, what your average MPG is, and that states tax per gallon of fuel used there. Do I have that correct? If so how do you keep track of how many miles you run in each state? And do you just pay based on whatever average MPG you got for that quarter?

Say you are running a fleet and have some owner operators leased on to you and you take their IFTA from their settlements. I'm thinking the honorable thing to do would be to track every owner operators individual fuel mileage and bill their IFTA accordingly. With the fleet you can just use a fleet average since the company is paying IFTA for all those trucks. I'm wondering if leased on owner operators could get screwed since an o/o can, in general, get better fuel mileage than a company driver. But the company just pools all the trucks, leased and company together so the o/o is paying more IFTA then he/she owes while the company benefits by the o/o high mpg raising the fleets MPG.

OK so back on track, you are an o/o with your own authority and you pay your own IFTA. How do you come up with the numbers and calculate it. If you are leased onto a company how do you calculate it to make sure the company isn't screwing you with higher IFTA taxes than you deserve.

I hope this all made sense. This is kinda new to me.

 

OK, so each time you cross a state line you write down the odo reading. So companies that use qualcom or some other tracker they record the mileage automatically in each state. Then you use the fuel receipts. Now this spreadsheet has to have the current fuel taxes for each state in it somewhere. Do you just check the atlas or online to get updated fuel tax rates for each state? And IFTA does have to be reported quarterly right? Or is it monthly?

 

Hoo, it just got more complicated. I'm certain I will be running ky, va, and in lol. Though I will be leased with this taken out of my settlements automatically I like to know why I am paying what I am paying.

On the fuel routing programs, they are a PITA, seriously. The company I drive for now uses the rand mcnalley one and it drives me nuts. I once fueled up twice within an hour of each other, 65 gal per fuel stop. As a single driver I'd have to see a pretty good return on investment to pay the monthly fee to put myself through that. Though I know there will be planning when I run my own truck based on the fuel discounts the fuel card provides and cost of fuel at the truckstops. I just read the nastc thread which goes pretty far into detail about planning stops based on discounts and pump prices.

You said you use gps units in the trucks to track the miles in each state. My rand mcnally will track how far I drive in each state, but I noticed it can be off a few miles from the odometer. Not sure if I would trust it to reliably record the miles driven in each state. You probably use some type of commercial unit designed for this purpose correct?

 

In my slightly educated opinion I would say you are correct. I'm guessing intrastate carriers do not have to file IFTA for this reason as they buy fuel and drive in 1 state only. Or if they do file the lines always balance.