Double Yellow's Company Driver to Independent Thread

I've mentioned it before, but if I had it to do all over again, I probably would have started out pulling flatbed with Prime rather than pulling a van for Covenant & Con-Way. I have read enough to know the laws -- how many straps or chains a load requires, but I have no experience actually putting them on and tarping. I just wouldn't feel comfortable learning that on top of starting up a business.

An additional reason is I have a number of fuel saving ideas/inventions for vans that I intend to develop once my intellectual property agreement with Con-Way expires later this month (when hired, one of the pieces of paperwork they required you to sign gave them the rights to any intellectual property you develop while under their employ & for the 6 months afterwards). Some of those ideas could transfer to flat bed, but the market wouldn't be as strong.

 

One of the main reasons many people choose to lease under someone else's authority is to avoid "all the extra paperwork" that comes with having your own authority. Sure there was a lot at the start, but once running I haven't really found this to be the case... Of the additional paperwork, the most time consuming is IFTA which really isn't too bad.


Understanding IFTA:

IFTA stands for International Fuel Tax Agreement (http://www.iftach.org/ <--- more info and current tax rates) and it is just a way for each state to get its share of fuel taxes even when you don't fuel in every state in which you drive. But many people, including experienced owner operators, don't understand how it works and wind up costing themselves extra money by buying expensive fuel to meet their bizarre or archaic strategies.

Filing is super easy, at least E-filing in California. You enter the total miles you drove in that quarter, say 30,000. Then you enter the number of gallons of fuel you purchased -- say 4,000. Next, you enter the miles you drove in each state. Finally you enter how many gallons of fuel you purchased in each state. That's it -- the e-filing form automatically calculates your quarterly mpg (7.50), how much fuel tax goes to each state, how much fuel tax you already paid at the pumps, and whether you owe or are due a refund. This isn't a pay-to-use program either; it's the state's free online filing form.

For example, if you drove 3000 miles in Texas, IFTA assumes you burned 400 gallons of fuel there (at 7.50 mpg) which means Texas is due $80 for the quarter (400 gallons at a tax rate of $0.20/gal). It makes no difference to Texas where you bought your fuel, they get $80 regardless. Had you purchased all your fuel in California, you would have prepaid $0.447/gal in fuel taxes which means you would have a refund of $0.247/gal. On the other hand, if you bought all your fuel in Oklahoma, you would have prepaid only $0.13/gal so you would owe your state's Board of Equalization $0.07/gal to cover the difference. Texas still gets $80...


So where should you buy your fuel?

Wherever it is cheapest "less IFTA." So let's say you're considering stopping at the pilot/j in either Effingham, IL or Columbus, OH. Today's pump price at both locations is $3.799, but in IL that includes $0.434/gal tax while in Ohio that includes only $0.280/gal tax. So the fuel in Effingham, IL actually costs $0.154/gal less ($3.365 vs $3.519).

Remember that your IFTA costs depend only on your fuel mileage and where you drive -- not where you buy your fuel. Your goal should be to purchase fuel at the lowest pre-tax cost -- not to maximize your refund or minimize the amount you owe at the end of the quarter.


The special cases:

That doesn't sound too complicated, right? It's not, but there are a handful of states that are a little different. Even still, your goal should always be to purchase fuel at the lowest pre-tax cost.

Oregon: Oregon does not participate in IFTA. When you buy fuel in Oregon, you give the attendant your DOT number and they sell you diesel tax free. They do this because Oregon charges you a(n obscene) mileage fee -- $0.1638/mile for 80,000 lbs -- regardless of how much fuel you burn. If, like me, you only run in Oregon a few times a year, before you enter the state you can just buy a 1-week trip permit where you prepay for the miles you intend to run. You can get 5 trip permits/year before it starts getting more expensive as they encourage you to get a $2,000 bond and file monthly returns (once you have some history, you can apply to have the bond removed and to file quarterly).

New Mexico: Like Oregon, New Mexico charges a weight-distance tax based on the registered weight of your vehicle. For 80,000lb, this is 0.04378/mile. Unlike Oregon, they also participate in IFTA, charging $0.21/gal for every gallon burned in state. So in addition to the quarterly IFTA return that you file in your home state, you also file a quarterly weight-distance return with New Mexico.

New York: Like New Mexico, New York charges both IFTA and a separate weight distance tax. I haven't personally filed any miles in New York yet, but it seems more complicated -- they charge different rates when empty and loaded, but exclude any miles traveled on the thruway (toll road) when determining the weight distance (you still owe IFTA on toll roads). I'm not certain, but I believe you can just pay all your miles as loaded if you did not want to keep track of empty miles separately. For 80,000lb they charge $0.0546/mile. For a tractor & empty trailer at 32,500lb, they charge $0.019075/mile.

Virginia and Indiana: Virginia and Indiana both charge an additional surcharge for fuel burned in their state, but they do not collect this at the pump. In Virginia, the surcharge is just $0.035 (on top of the $0.202 at the pump). In Indiana, the surcharge is $0.110/gal (on top of the $0.160 at the pump). So it costs you $0.237/gal to burn fuel in Virginia and $0.270/gal in Indiana -- no matter where you buy your fuel. But Virginia collects only $0.202 at the pump and Indiana $0.160 at the pump. If you e-file, it'll automatically apply the surcharge, so all you need to remember is that when you are comparing pre-tax fuel costs, you subtract only the fees they collect at the pump. Do not subtract the surcharge...

Kentucky: Not to be outdone, Kentucky collects $0.281/gal in IFTA at the pump, charges an additional $0.136/gal surcharge for fuel burned in state, and charges a $0.0285/mile weight distance tax. All paid quarterly.


The only ways to lower your IFTA costs are to get better fuel mileage and/or choose to drive through cheaper states. The total amount you ultimately pay in IFTA is not affected by where you buy your fuel -- where you buy fuel affects only how much you prepay.


Per mile road tax costs by state:

This assumes 80,000lbs & 7.5mpg and is as of Nov 2014 (it does change):

[TABLE]
[TR]
[TD]Rank[/TD]
[TD][/TD]
[TD]State[/TD]
[TD]Tax per mile[/TD]
[/TR]
[TR]
[TD]1[/TD]
[TD][/TD]
[TD]OK[/TD]
[TD]$0.017[/TD]
[/TR]
[TR]
[TD]2[/TD]
[TD][/TD]
[TD]SC[/TD]
[TD]$0.021[/TD]
[/TR]
[TR]
[TD]3[/TD]
[TD][/TD]
[TD]MO[/TD]
[TD]$0.023[/TD]
[/TR]
[TR]
[TD]4[/TD]
[TD][/TD]
[TD]TN[/TD]
[TD]$0.023[/TD]
[/TR]
[TR]
[TD]5[/TD]
[TD][/TD]
[TD]NJ[/TD]
[TD]$0.023[/TD]
[/TR]
[TR]
[TD]6[/TD]
[TD][/TD]
[TD]GA[/TD]
[TD]$0.024[/TD]
[/TR]
[TR]
[TD]7[/TD]
[TD][/TD]
[TD]MS[/TD]
[TD]$0.024[/TD]
[/TR]
[TR]
[TD]8[/TD]
[TD][/TD]
[TD]AL[/TD]
[TD]$0.025[/TD]
[/TR]
[TR]
[TD]9[/TD]
[TD][/TD]
[TD]LA[/TD]
[TD]$0.027[/TD]
[/TR]
[TR]
[TD]10[/TD]
[TD][/TD]
[TD]TX[/TD]
[TD]$0.027[/TD]
[/TR]
[TR]
[TD]11[/TD]
[TD][/TD]
[TD]CO[/TD]
[TD]$0.027[/TD]
[/TR]
[TR]
[TD]12[/TD]
[TD][/TD]
[TD]DE[/TD]
[TD]$0.029[/TD]
[/TR]
[TR]
[TD]13[/TD]
[TD][/TD]
[TD]SD[/TD]
[TD]$0.029[/TD]
[/TR]
[TR]
[TD]14[/TD]
[TD][/TD]
[TD]NH[/TD]
[TD]$0.030[/TD]
[/TR]
[TR]
[TD]15[/TD]
[TD][/TD]
[TD]AR[/TD]
[TD]$0.030[/TD]
[/TR]
[TR]
[TD]16[/TD]
[TD][/TD]
[TD]IA[/TD]
[TD]$0.030[/TD]
[/TR]
[TR]
[TD]17[/TD]
[TD][/TD]
[TD]ND[/TD]
[TD]$0.031[/TD]
[/TR]
[TR]
[TD]18[/TD]
[TD][/TD]
[TD]VA[/TD]
[TD]$0.032[/TD]
[/TR]
[TR]
[TD]19[/TD]
[TD][/TD]
[TD]MA[/TD]
[TD]$0.032[/TD]
[/TR]
[TR]
[TD]20[/TD]
[TD][/TD]
[TD]WY[/TD]
[TD]$0.032[/TD]
[/TR]
[TR]
[TD]21[/TD]
[TD][/TD]
[TD]UT[/TD]
[TD]$0.033[/TD]
[/TR]
[TR]
[TD]22[/TD]
[TD][/TD]
[TD]ID[/TD]
[TD]$0.033[/TD]
[/TR]
[TR]
[TD]23[/TD]
[TD][/TD]
[TD]AZ[/TD]
[TD]$0.035[/TD]
[/TR]
[TR]
[TD]24[/TD]
[TD][/TD]
[TD]KS[/TD]
[TD]$0.035[/TD]
[/TR]
[TR]
[TD]25[/TD]
[TD][/TD]
[TD]NE[/TD]
[TD]$0.035[/TD]
[/TR]
[TR]
[TD]26[/TD]
[TD][/TD]
[TD]IN[/TD]
[TD]$0.036[/TD]
[/TR]
[TR]
[TD]27[/TD]
[TD][/TD]
[TD]NV[/TD]
[TD]$0.036[/TD]
[/TR]
[TR]
[TD]28[/TD]
[TD][/TD]
[TD]MT[/TD]
[TD]$0.037[/TD]
[/TR]
[TR]
[TD]29[/TD]
[TD][/TD]
[TD]OH[/TD]
[TD]$0.037[/TD]
[/TR]
[TR]
[TD]30[/TD]
[TD][/TD]
[TD]MD[/TD]
[TD]$0.038[/TD]
[/TR]
[TR]
[TD]31[/TD]
[TD][/TD]
[TD]MN[/TD]
[TD]$0.038[/TD]
[/TR]
[TR]
[TD]32[/TD]
[TD][/TD]
[TD]AB[/TD]
[TD]$0.041[/TD]
[/TR]
[TR]
[TD]33[/TD]
[TD][/TD]
[TD]VT[/TD]
[TD]$0.041[/TD]
[/TR]
[TR]
[TD]34[/TD]
[TD][/TD]
[TD]ME[/TD]
[TD]$0.042[/TD]
[/TR]
[TR]
[TD]35[/TD]
[TD][/TD]
[TD]RI[/TD]
[TD]$0.043[/TD]
[/TR]
[TR]
[TD]36[/TD]
[TD][/TD]
[TD]WI[/TD]
[TD]$0.044[/TD]
[/TR]
[TR]
[TD]37[/TD]
[TD][/TD]
[TD]FL[/TD]
[TD]$0.044[/TD]
[/TR]
[TR]
[TD]38[/TD]
[TD][/TD]
[TD]MI[/TD]
[TD]$0.047[/TD]
[/TR]
[TR]
[TD]39[/TD]
[TD][/TD]
[TD]WV[/TD]
[TD]$0.048[/TD]
[/TR]
[TR]
[TD]40[/TD]
[TD][/TD]
[TD]NC[/TD]
[TD]$0.049[/TD]
[/TR]
[TR]
[TD]41[/TD]
[TD][/TD]
[TD]WA[/TD]
[TD]$0.050[/TD]
[/TR]
[TR]
[TD]42[/TD]
[TD][/TD]
[TD]IL[/TD]
[TD]$0.058[/TD]
[/TR]
[TR]
[TD]43[/TD]
[TD][/TD]
[TD]CA[/TD]
[TD]$0.060[/TD]
[/TR]
[TR]
[TD]44[/TD]
[TD][/TD]
[TD]MB[/TD]
[TD]$0.064[/TD]
[/TR]
[TR]
[TD]45[/TD]
[TD][/TD]
[TD]ON[/TD]
[TD]$0.065[/TD]
[/TR]
[TR]
[TD]46[/TD]
[TD][/TD]
[TD]PA[/TD]
[TD]$0.068[/TD]
[/TR]
[TR]
[TD]47[/TD]
[TD][/TD]
[TD]SK[/TD]
[TD]$0.069[/TD]
[/TR]
[TR]
[TD]48[/TD]
[TD][/TD]
[TD]NS[/TD]
[TD]$0.070[/TD]
[/TR]
[TR]
[TD]49[/TD]
[TD][/TD]
[TD]NM[/TD]
[TD]$0.072[/TD]
[/TR]
[TR]
[TD]50[/TD]
[TD][/TD]
[TD]CT[/TD]
[TD]$0.073[/TD]
[/TR]
[TR]
[TD]51[/TD]
[TD][/TD]
[TD]NL[/TD]
[TD]$0.075[/TD]
[/TR]
[TR]
[TD]52[/TD]
[TD][/TD]
[TD]KY[/TD]
[TD]$0.084[/TD]
[/TR]
[TR]
[TD]53[/TD]
[TD][/TD]
[TD]NB[/TD]
[TD]$0.088[/TD]
[/TR]
[TR]
[TD]54[/TD]
[TD][/TD]
[TD]PE[/TD]
[TD]$0.092[/TD]
[/TR]
[TR]
[TD]55[/TD]
[TD][/TD]
[TD]QC[/TD]
[TD]$0.092[/TD]
[/TR]
[TR]
[TD]56[/TD]
[TD][/TD]
[TD]BC[/TD]
[TD]$0.104[/TD]
[/TR]
[TR]
[TD]57[/TD]
[TD][/TD]
[TD]NY[/TD]
[TD]$0.109[/TD]
[/TR]
[TR]
[TD]58[/TD]
[TD][/TD]
[TD]OR[/TD]
[TD]$0.164[/TD]
[/TR]
[/TABLE]

Most of the time, there is 1 route that is clearly the best route to take, but occasionally you may find it worthwhile to add more miles in order to bypass or minimize miles in an expensive state.


So how do you keep track of how many miles you ran in each state?

I use a 5-in-1 driver's log sheet like this one:



I always keep a dry erase market at hand and as I leave one state and enter another (my GPS gives me an audible warning 1 mile before state borders), I write the last 3 digits of my odometer on the windshield. At the end of the day, it makes tallying the miles a snap. Occasionally I will forget and have to use google maps to recreate my route (unless I stayed on one interstate the entire time -- then I can just google "how many miles is i40 in Arizona"). But if I don't forget, and I usually don't, it only takes another minute or two to fill that part of the log book out at the end of the day.

Once the quarter is over, I have 1 month to file. I go through my logs and add up the mileage by state & then take my fuel receipts and add up the gallons purchased in each state. That's all the "extra" work needed! Maybe 30 minutes at the end of the quarter on top of 1-2 minutes per day.

My Rand McNally GPS can actually do all of this for me, especially if I enter every fuel-up. It'll export a spreadsheet file breaking down mileage & fuel purchased by state, but since mine still freezes on occasion, I just prefer to do it by hand for better accuracy.


One last niggling tip:

When it comes to gallons purchased, IFTA rounds to the nearest whole gallon. 50.5 gallons is 51. 50.499 is 50. You probably won't be able to keep track of this for states in which you frequently fuel, but there are a handful of states in which I purchase fuel only once per quarter. Clicking the pump off in 6 of those states at xxx.499 gallons gives me 3 gallons of untaxed fuel -- legally. So what if it only saves $1 in taxes -- I'm still sticking it to the man!