Quote:
Originally Posted by LDB
We deduct the entire amount of fuel purchased so we are getting a deduction on the fuel tax portion of the purchase. The fuel tax portion of the purchase goes into an imaginary piggy bank. Each time we buy fuel money goes into the pig. Each state we drive in reaches into the pig at the end of the quarter to take out a set amount per gallon burned in that state. Where we buy is the factor determining how much is in the pig. If there isn't sufficient money in the pig then they reach into our pocket for the rest. If there's more than they need then we have a little surplus in the pig for the next quarter. Income taxes don't affect the pig. It is the temporary repository of fuel tax funds awaiting distribution to the states.
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Wow, now it almost sounds similar to our GST reporting now that you put it that way! Thanks for making it into a much easier to understand scenario!