How much are fuel taxes and...

[LDB]

what other taxes should I be expecting as far as road tax, use tax, etc. as an O/O? I realize fuel taxes vary by state but all I'm looking for is an approximate amount whether it's to figure 5% or 20% or 100% of the amount I spend on fuel. I also would appreciate approximations on any other taxes I may have to file and pay. Thanks.

 

[redytrk]

Cant help much with this question,because our "C"is under 26,000 and exempt from these additional taxes.
How is it going with your new gig?have you made your first load?

 

[Tennesseahawk]

some of that info should be on your fuel receipt... state fuel tax, road usage tax, federal tax, etc. If you want an individual breakdown on which states get what money from the fuel tax, that should be on your cab card.

 

[Glen Rice]

This has always been the mystery subject in trucking! Your carrier can supply you with the fuel tax sheet that will have the breakdown of each state. Rule of thumb, buy enough fuel in each state based on your miles per gallon. It does you no good to buy "Cheap" fuel only as the taxes will not be available to pay your taxes owed to the higher taxed states. I know this is confusing, hopefully your carrier can shed a little light on how they file your fuel tax and what dates when each quarter starts. Sorry about the confusion. I know of operators that bought nothing but Indiana, Georgia, and Virginia fuel and ended up owing hundreds of dollars for uncollected fuel tax! You know the old saying "Pay me now, or pay me later". See where this is going? Good luck with your your tax situation.

 

[DocRushing]

Glen: Did those other truckers not also get credits (through their carriers) from Georgia, Indiana, and Virginia, for the taxes paid (at the pump) on their large purchases in those states? It's supposed to happen that way. That's one of the purposes of the IFTA. Each state gets its share of fuel tax on miles run in that state -- through the quarterly IFTA reports. Each state is also supposed to refund "excess" tax on purchases in that state -- that is, fuel tax paid at the pump in excess of the required amount corresponding to the miles run in that state. Those refunds too take place through the quarterly IFTA settlements. Or have some of those carriers unlawfully kept the refunds for themselves -- instead of crediting the refunds to the owner-operators? My carriers have always given me credits for fuel taxes on purchases in states in which I had bought "long" -- just as the carriers also charged me debits for fuel taxes due to the other states in which I had bought fuel "short." Doc.

 

[mcbride]

Hi,
FYI, there is a thread here that will tell you anything you want to know about fuel taxes. lol

http://www.expeditersonline.com/cgi-bin/dcforum/dcboard.cgi?az=show_thread&om=807&forum=DCForumID2

mcbride-
--What goes around comes around--

 

[LDB]

I read that thread and while it is informative it still doesn't give me any indication of whether to expect $1, $100, $1000 or more in fuel taxes. What I'm looking for is an approximation of how much usage taxes I'm going to owe to see if my spreadsheet is even remotely accurate on that item. I am in the process of converting entries from wild guesses to actual figures. So far every converted category has been lower than the original estimate which is good for the bottom line.

Can anyone tell me how much fuel tax they pay and how many gallons it's based on? I know my numbers will be different but at least I'll have some rough estimate to go on. Thanks.

 

[davekc]

Once you obtain your fuel tax sheet with the amounts of tax per gallon, you can then make an assessment of what your tax should be. On average with a straight truck, I would expect 50.00 to 100.00 per quarter. Could be alittle higher or a little lower depending on if you are watching. Just a few examples would be if your truck is 33,000 or less, there is no tax caculated in OH. Fuel is cheaper in IN, however there is a .10 cent surcharge after the fact that you are billed on your settlement. Tolls in NY are credited against fuel tax in NY. For trucks over 33,000 in OH, they are not. Fuel is more expensive initially in FL than GA. But in the long run, FL winds up being cheaper because of the tax structure. If for example you buy fuel in Jacksonville FL, the tax is .20 something, but you run most of the miles in GA. where it is .15, you will get the difference in credit to apply to another state. Have I confused you yet?
Davekc

 

[LDB]

Well, I've done some more research and gotten actual numbers from another driver as well. Based on his input of 30k miles, 5.6 mpg and $226 in taxes for the quarter I'm going to estimate mine at $120 per quarter based on my truck getting 9+ mpg and probably only about 25k miles per quarter. That should be pretty close to accurate although maybe just a little bit high. I'd rather be over a few though and find a few extra in my pocket when all is said and done.

 

[mcbride]

LDB,

Hi.
Our quarter payments appear a little higher than the others listed here. We pay between $150.00 and $350.00 per quarter. We make a point of buying fuel in every state too. Like Glen indicated, buying fuel in cheaper priced states doesn't really save you anything in the long run

mcbride-
--What goes around comes around--

 

[raceman]

This is a fun subject. I am not sure anyone can really answer your question. Here is what I do and I usally end paying very little a quarter that was not covered from actual purchases. Simply buy fuel in each state you drive in. It works! e.g. If you are going to run 200 miles in Ky. and you get 10 miles to the gallon, buy 20 gallons of fuel. Just an example. I actually have my drivers buy fuel per state as they run not actually stopping on each run but per quarter. Just be sure to estimate your milage in each state and be sure to buy enough fuel to cover the mileage. It really does work out pretty well. After you learn your running area it becomes very easy to do. Maybe I am just lucky but that works well for me.

raceman

 

[davekc]

Probably should mention also that you need to know how your company calculates your fuel tax. Some calculate it on a fleet average, and some figure it on your individual vehicle. What is better is determined by what kind of fuel milage you are getting and weighing it against the above.
Davekc

 

[DocRushing]

I understand the IFTA program, and I understand how it works. But I wonder -- still -- about Glen's acquaintances who bought fuel "long" in Georgia, Indiana, and Virginia, then bought fuel "short" in other states, then owed large *net* amounts for the additional fuel taxes. If the carrier(s) of Glen's acquaintances had handled the IFTA quarterly settlements in an honest way, then the taxes paid at the pump on the "long" purchases in certain states would have largely offset the taxes *not* paid at the pump on the "short" purchases (or non-purchases) in certain other states. When I raised my question to Glen, I sought to stimulate a discussion about whether one or more carriers dishonestly -- and unlawfully -- pocket those credits, which are the property of the owner-operators. I also wonder whether some of the carriers pocket the credits for tolls paid in New York -- instead of passing those credits to the owner-operators. (In the eyes of the law, when one party (for example, a carrier) handles the property (including the funds involved in the IFTA tax settlements) of another party (an owner-operator), then the carrier has a "fiduciary" duty to handle the funds of the owner-operator with "utmost good faith" -- an extremely high duty of care -- much more care than the carrier uses even in handling its own funds.) Doc.

 

[LDB]

On my first two fills I got 9.97 and 10.19 mpg. Those were both running empty. They were both done at about 1/2 full on the gauge. That was running about 62-63 mph cruising speed. In my CPM spreadsheet I used 8.5mpg and $2.10 per gallon to calculate my costs. I expect to do better on both sides although perhaps not too much on fuel cost and not for too long.

I can understand the concept of buy what you need for the state you are running in. I also understand the concept of averaging purchases and thereby averaging taxes. It would be too much trouble to buy in every state and waste too much time however I like the idea of buying based on averages once I learn where I'm running and how much in each state.

I feel comfortable my company will honestly figure the taxes and I will not pay any more than my share. Our trip envelopes are printed with a grid to record miles per state and they emphasized that a lot in orientation so I think they are figuring on each unit individually not corporately.

Thanks for all the feedback so far and please continue the discussion as it's interesting.

 

[davekc]

You can ask your carrier as to how the tax is computated. You can do the calculations yourself. I would advise this to insure your carrier is doing it correctly. We were with a larger carrier several years ago and was completely inaccurate in the calculations. It was corrected but took a while to fix. And yes, you quessed it. The mistakes were always in their favor. Follow that golden rule; never assume too much.
Davekc
On a side note, if you are tracking your milage and keeping fuel receipts, a competent tax preparer versed in transportation should be able to figure it out for you.