IFTA Calculation through ELD and Fleet Management
- Author Alice Derrick
- Published June 25, 2019
- Word count 697
IFTA is a fuel tax agreement among 48 U.S. states and 10 Canadian Provinces to centralize reporting and levy of taxes under a single license. Before IFTA, truck drivers and operators were required to pay fuel tax separately to all state they travelled.
It might seem that calculating fuel tax for interjurisdictional travel according to the rules of every state is an annoying task. With newer technology like GPS, and the ELD mandate, managing a fleet, consumption of fuel, its movement, and other tasks have become efficient and cost-effective.
Calculating tax under IFTA can be easily explained in five steps:
Tracking the number of miles: It is important to keep a correct record of fuel consumption in each state travelled. Drivers must record the odometer reading whenever they cross the state line, and work with fleet managers to provide accurate information. However, various fleet management software have made keeping a record of fuel consumption, travel, and overall tracking of the movement of the fleet through GPS.
At Matrack, we proffer a fleet tracking system with 4 different hardware solutions to choose from, according to your needs. We also have developed outstanding application that can be downloaded into any mobile device of your choice, assisting you in keeping track of your fleet from wherever you want. With the help of our fleet tracking system, calculating the number of miles travelled in each state can be done with just a click.
Fuel Purchases: To file for IFTA tax, the following information referring to fuel purchase must be submitted with original invoices or receipts:
Vehicle plate number
Fuel Purchase date
Number of gallons of fuel purchased
Type of fuel
Price per gallon
Fuel seller’s name
Fuel seller’s location
Along with GPS, Matrack proffers our clients with fuel cards in partnership with American Express. It greatly support the fleet managers to keep a check on fuel use, better deals, and also a detailed report on fuel purchase history, making it easier to organize the data required to file for tax under IFTA.
Fuel consumption in every state: For a truck that has travelled through more than two member states of IFTA, calculating mileage for every state can be done through two simple equations:
Total miles travelled in a member state ÷ Overall fuel mileage = Fuel Consumed in that state
Complete Fuel mileage = Total number of miles driven ÷ Total Gallons of fuel consumed
However, there are several cloud-based fleet management applications that are efficient and correct in keeping a record of fuel consumption data. Matrack Incorporation’s new product MA3000 is an FMCSA – approved ELD comes with several features that help in calculating fuel consumption easier, as it records data for duty status, miles travelled, GPS tracking, and more on a single platform.
Applicable rate of Fuel Tax: Fuel tax for each state can be vary, and also different for every quarter. International Fuel Tax Association website gives a precise chart of fuel tax applicable on various types of fuel, in each state, for every quarter.
Final Calculation: To calculate the original amount of fuel tax, the following formula can be used:
Fuel Tax required to be paid – fuel tax already paid = fuel tax payable
Fuel tax paid to the state is mentioned in the receipt or invoice of fuel purchase.
It is important to remind that the equations mentioned above might require adjustments based on certain IFTA regulations that might be applicable to certain vehicles or under certain conditions. For example, adjustments for taxable miles, taxable gallons of fuel consumed and surcharges must be taken into account as per the rules of each jurisdiction.
As soon as IFTA was adopted for interjurisdictional fuel tax calculations and reporting, Matrack updated all its applications to obey with rules and support IFTA regulations. Our solution makes it easier to calculate the mileage, fuel use, taxable miles and gallons, and the fuel tax for separate states.
Using a Matrack Incorporation Fleet Management application and hardware makes calculating for IFTA efficient, easy and accurate. It also helps save a lot of time, otherwise spent in recording, manual collection of data, and calculation of travelled miles, gallons of fuel used, taxable fuel and total tax.
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