working with IFTA

I agree. Here's my simplified take:

This statement is false. The tax is the tax in each state you travel miles in. You either buy the fuel in that state and "pre-pay" or buy it somewhere else and possibly end up with a balance due or refund, depending on where you bought it and what the surplus or deficit turns out to be. You pay the same tax, regardless. The only thing that matters to the tax total is miles in a state and your fleet mpg.

The only way to insure you pay the lowest fuel cost is to find the price of the fuel not including IFTA, then buy fuel there.

That said, this is one of the benefits of being the boss of yourself. If vang's system works for him, that's awesome. It doesn't take any money out of my pocket, so I'll stop beating the dead horse right there. There's a few things I do myself that suits me but may add cost as a result. Who cares, if it works for me?

PS: The easy way to net zero on IFTA is never leave the state. But then you wouldn't need IFTA and IRP if you did that. Double-dip!

PPS: I was running the back roads today and needed to top off my reefer tank. The place I stopped was one of the rare ones with an offroad pump. Saved a few tax nickels by putting red fuel in the reefer.

 

As others have said. You know nothing of IFTA.

If you owe $700 for fuel tax, you owe it whether you write them a check at the end of the quarter or whether you pay it at the pump. That cost DOESN'T CHANGE.

You're hamstringing yourself by filling up in states you probably shouldn't be.

If PA is $3.85 and OH is $3.82... do you know which state is the best buy and which state is going to cost you?

If you think you'll drive 400 miles in OH and 400 miles in PA and you're getting 6mpg, filling up 33.3g in Ohio and 33.3g in Pennsylvania is not the smart move. In the end you still will owe $26.31 for fuel tax. Of which, you paid it all in advance at the pump. HOWEVER, you overpaid for diesel and have just spent $229.10 (fuel not counting state tax). Had you filled up in Pennsylvania, you would have paid $222.67 (diesel not counting state tax), and had paid $34.00 to IFTA. Your tax bill would've been $26.31. You would've paid $6.43 less for diesel and had a credit of $7.69 in your IFTA account.

You're costing yourself money. A lot of money. And yet you keep doing what you're doing because that's 'what you've always done'.




As for Oregon. Oregon doesn't charge state tax if you have a weight distance permit (which you're required to have if you travel in Oregon). So, your pump price isn't contributing anything to your IFTA account.

And though Oregon's WDP is expensive per mile, you pay zero for fuel burned in the state.


At the end of the day, you still owe the tax where you burnt the diesel. Not where you bought it. Remember, your IFTA tax bill at the end of the quarter is the total of all tax paid to all states. The fact you paid in advance at the pump does not mean you paid less for IFTA. Or if you owe a check that you paid more. Only look at DIESEL PRICE - STATE TAX = DIESEL COST. Your IFTA tax only hinges on your MPG. Want to spend less, get higher MPG. That's it.

 

RedForeman, Slyfox, & Ed, here's a quick math lesson for the three of you!! Lets assume every state has the same pretax diesel price of $3.00. I suggested that the only way to assure that one payed the lowest possible price for diesel, assuming all states are equal pretax deiesel is to net $0 on a IFTA return. How is this wrong? I'll answer for the three of you, it isn't, math does not lie!! When you have to pay, it means you are less than equal to $0, when you get a credit you are more than equal to $0. So for someone that doesn't understand IFTA how is it that I understand the concept of bringing a return to $0, which is what happens on a credit/payment. The OP was -$700, he paid $700, he is now equal to $0. If a person drove miles in a state, they will owe for those miles, my concept whether or not you three agree, isn't less profitable. A surplus is a surplus! One guy flips flops, one guy insists a surplus is lost revenue, and the other guy doesn't read a post prior to commenting. So here's homework for the three of you, assume a pretax price of $3.00 for all states, take 5000 miles plug it into any states with a strait IFTA tax(no OR, or surcharge states) to keep it simple, divide it by 1,000 gallons plugged into any of those states any way you want, and get back to me. We will all net $0 after a credit/payment. We will all have paid the lowest possible price, why? Because we all purchased the fuel at $3.00. So please, the three of you enlighten me how I don't understand IFTA, but before you do understand the concept of math.

 

You guys explained a lot for me thanks. Never seen it explained this way and know a lot who strive for a zero balance, myself included, although I didn't put much effort into it. For me fuel is one of those things I just purchased at my convenience but it makes sense now. Vang you're missing the part where you will always pay the exact same tax per mile driven regardless if your IFTA balance is negative, positive, or at zero. The tax you pay per mile is a given, you might say a fixed cost. If you drive 1,000 miles in 4 states you will pay the exact same fuel tax amount regardless if you overpaid or underpaid or broke even at the pump on the fuel tax. That price is fixed and you will pay it regardless if now or later. That is why what they are saying about the cheapest fuel being the price without state tax on it is your cheapest fuel. Pump price can be misleading and practically is useless. You're never saving any money on fuel taxes owed per mile.

 

Perhaps you summed it up better or in different wording then me. The whole point is to purchase it at the cheapest possible pretax price, we all know & agree on that. I know in the end the tax will be the same, I just always preferred to over pay rather than under pay the tax. But some how it was assumed because I don't calculate things the same as others, even though in the end it's the same, I "Don't understand it". My suggestion was to the OP as to how he can use IFTA to his advantage, maybe wrong wording on my part, it was meant to avoid that "shock" of a $700 bill. Overpaying doesn't mean one lost revenue, because like you pointed out the tax is the same, it just means that whoever overpaid has their revenue held in a non interest account, who ever underpaid writes a check. Maybe you can take a stab at explaining the $0 balance, I had no luck.lol I have a excel spreadsheet that I used, when I found the cheapest pretax diesel I would plug the numbers in and watch what it did to my IFTA. I would post but I don't know if I'm allowed to or if will work as a excel after posting.

 

Your example is the same as mine except you plugged in different figures, so I'm guessing we both know nothing. I have know other way of stating PRETAX DIESEL! Don't jump on the bandwagon, state I know nothing, then proceed to show the same example. If you didn't understand netting $0, it means you didn't understand, not that "I know nothing of IFTA". It's obvious you didn't understand because you think over paying is costing one money, had you gone back in read, or even read the quote you quoted, you would see where the money went. Is it in this hand or this one, it doesn't matter it's still there!!

 

after reading this im glad i pay someone 30 a month to do mine......you have me confused

 

Really?

Let's go take a walk down memory lane, shall we?

How exactly do you 'come out on top' if, as you now say: 'If you didn't understand netting $0'. There is no 'coming out on top', which is what we were arguing with you in the first place.

But, it gets better.

So, your inability to save money means you'd rather have the state taxing agency responsible for motor carrier fuels to hold on to your money so you don't spend it? Instead of putting it into an even meager interest-bearing account, you'd rather have it 'out of sight, out of mind' until it gets dumped in your lap?

And here it is again:

Only point you gloss over is 'pre-tax price'... it's exceedingly difficult to get two states to have the same pre-tax price. Our argument was that trying to get a zero-sum on your IFTA statement at the end of the quarter should not be a priority. It shouldn't even be a though in your head. Buying your cheapest fuel should be your only overriding concern.

Your argument about 'working in your favor' is that you'd rather pay $4.00 a gallon in Ohio ($0.28/gal tax) than $3.80 a gallon in Indiana ($0.16/gal tax) because you'll bank more into your pre-paid IFTA account at the pump.

If diesel is equal priced, I STILL would rather pay my taxes when they're due. You aren't saving money to cover your plates. That's a disingenuous thing to say. And is why so many came back at your for your position.

Once we seem to have gotten you to admit that your method in Quote 1 was a fallacy, you came back with this:

Please be aware, that your math is incorrect. I stated that the difference in DIEESL PRICE MINUS TAX in PA and OH were difference. Hence, if you used your patented "fuel where the tax is higher" teaching method, you would overpay for DIESEL PRETAX. Sure, you'd overpay IFTA, but you owe what you owe IFTA no matter where you fuel. Your DIESEL PRETAX cost can never be recovered.

For someone here asking how "IFTA Works",... telling them to fuel at the high tax states was a bogus proposition. Luckily with enough reprisals, you stated how your original post was wrong and that it should only be a consideration when the DIESEL PRETAX price is the same. But even then, it's only a 'bonus' if you're unable to not spend money sitting in your bank account. The fiscally responsible among us would rather have our money sit in our hands, not someone else's.




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As for snowblind, do you do mileage reports for trips to give to the person doing your IFTA taxes? Do you give them your fuel receipts?

Plugging some numbers into a spreadsheet for $90/quarter is something you should be able to do in a span of about 10 minutes.


Now, if you're paying cash and have to save every receipt, it may be a little burdensome to then tally them up, but it's still cheaper. Ohio gives a simply spreadsheet ready to go that you just plug in the numbers. Then you transpose those onto the official return.

IFTA also goes smoother when you have a fuel card that calculates your monthly gallons by state for you. It's even faster (FleetOne does this and makes adding the totals simple).

 

Sly Fox, your argument is mute if you can't comprehend the very quotes you quoted. Read my friend, read!! Your problem is your jumping on the bandwagon without reading all posts. Some of my posts were answers to other posts. You also misquoted me, don't argue with me to argue, show me I'm wrong with math, specifically the homework. You can't, you just disagree with my method even though it's not wrong. It's not your way or Eds way, but it's not wrong.

 

where you said there is no way to optimize for ifta, buying the cheapest fuel after taxes is essentially optimizing for ifta.

example the pump price in ga and fl are about equal, but fl tax is quite a bit higher(ga has a sales tax added) if you ran those 2 states exclusive, if ya bought all yer fuel in fl , you would have quite a credit coming. that in fact is optimizing, wheter its for a credit or simply not to owe anything.