Got a question about fuel taxes

Discussion in 'Ask An Owner Operator' started by Beethoven, Mar 20, 2013.

  1. Beethoven

    Beethoven Light Load Member

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    I am going back out on the road only this time as an O/O. I am wondering how do you know the best states to buy fuel?

    I am in ohio and only ran OH, IN, and KY. Both states have higher taxes than OH (i think) but the truck is registered here as well. I was always told by friends and family in the business to try not to buy fuel in KY or IN because the taxes would really make it more expensive.

    As always thanks and be careful!!

    B
     
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  3. ironpony

    ironpony Road Train Member

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    The IFTA tax you're going to pay is the IFTA tax you're going to pay. Think of it this way... the tax paid at the pump goes essentially into an escrow account for you. If you don't pay enough at the pump, you're going to have to write a check. If you pay too much, IFTA owes you money back. So it really doesn't matter whose tax you pay. What does matter is the price of the fuel... competition tends to keep the pump price at a given average level - give or take. So we can take advantage of that. Get the price at the pump for your in-route stops, and subtract the fuel tax and any discounts you get. What is left is the base price of the fuel... buy the cheapest base price.
     
  4. Oscar the KW

    Oscar the KW Going Tarpless

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    Carrier I'm leased to now pays the fuel tax and doesn't charge it back to me. Before then I would always fuel where it was cheaper, never paid in more than $55 per quarter. A friend of mine would always stop and put some in here, then stop and put some in there, and usually only paid aroung $10-20 per quarter. I told him he spends twice the difference just screwing around buying fuel here and there, he would always say well atleast I ain't paying anymore than I have to. Whatever........
     
    Beethoven Thanks this.
  5. MNdriver

    MNdriver Road Train Member

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  6. Sly Fox

    Sly Fox Road Train Member

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    What ironpony stated.

    No matter what, at the end of the day, you owe the state you drove through their share of the fuel tax. Regardless of where you bought the fuel from.


    I buy a lot of fuel in New Jersey when going in and out of the northeast to Pennsylvania because the base IFTA price is usually so much cheaper (with my discounts) than PA, OH, CT, NY, or MA. At the end of the quarter, I wind up owing some money. No big deal, because I saved it at the pump. I could've bought all my fuel in CT, over paid the base price, and then gotten a small check back. But, my cost per mile would've went up drastically because of it, factoring fuel and fuel tax.
     
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  7. ironpony

    ironpony Road Train Member

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    The other thing we need to remember is that the price of fuel is quite volatile. What used to be the cheapest fuel stop last week, might well be rather expensive this week. Don't get complacent... if it's coming out of your pocket check the prices before you buy!
     
  8. 25(2)+2

    25(2)+2 Trucker Forum STAFF Staff Member

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    The Rand McNally Motor Carrier Atlas has the tax rates, these can change as noted in the Atlas. Some of the fuel stops itemize what goes where on the fuel receipt they give you, too.

    IN and KY don't charge exempt trucks enough tax, IN also has an 11 cent surcharge according to the Atlas and there was some other reason an O/O told me he never buys fuel in IN. IL and PA charge a high rate of tax. I find by subtracting the state tax rate from the price per gallon, that the high tax states have the lowest net cost for fuel, or the lowest rack price.

    I drive 94 into IL from WI quite a bit, and I can buy fuel just over the border, in IL usually for less per gallon actual price than around 20 miles north, between Racine and Milwaukee, and have more road use taxes paid as well.

    WI tax rates aren't the lowest, but are lower than IL.

    We used to be told to buy fuel going east at Toledo,OH(Perrysburg) and their posted price is now among the highest I see the whole trip from Iowa to NYC. Lots of trucks get fuel there, but I hardly ever stop there to get fuel now.

    Buying fuel in a state, I try to buy from the cheaper places, Monee south of Chicago on 57, Hubbard in OH just west of the PA line are 2 local areas where the price is lower.

    Anywhere a new major has opened next to another major, the price tends to be lower as well.
     
    Beethoven Thanks this.
  9. ladywrongway03

    ladywrongway03 Heavy Load Member

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    dont forget KY has their own fuel tax agenda which is more.
     
  10. Beethoven

    Beethoven Light Load Member

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    Thanks much. I will have to look in my atlas and get their info. Also thanks for the formula Ironpony. That helped a lot.
     
  11. ironpony

    ironpony Road Train Member

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    Definitely compare the prices between states. If you have to buy fuel in one particular state - say because the big ol' "E" is staring at you then generally (unless you have some sort of discount at a particular chain) the lowest pump price works if you don't have time to get online to see.
    Don't worry about the per-mile surcharges. This is something you're going to pay for the privilege of using the roads. It's better just to think about routes that may avoid these places, but only if it's not going to stack more miles onto your trip to go around.
     
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