Let's talk IFTA.

[rank]

Let's say there are 2 possible Flying J fuel stops on a 970 mile trip.

New Milford, PA: $3.359/gal
Napanee, ON: $1.015/L = $3.846/gal

On this 970 mile trip, there were:
-200 miles in Ontario
-366 miles in NY
-404 miles in PA

ON fuel tax =.143/L = .542/gal
NY fuel tax= .396/gal
PA fuel tax =.409/gal

ON fuel cost = $3.846 - $.542 = $3.30/gal without tax
PA fuel cost = $3.359/gal - .409/gal = $2.95/gal without tax

Have I figured this correctly? Can I really save $.35/gallon by fueling in PA instead of ON?

[merrick4]

Hey Rank, sorry just a quick digression, I just read in the paper tonight that two of three Canadians live within 62 miles of the U.S. Border. I found that interesting.

Sorry for the digression. Actually I am looking foward to the answers to your post as we all need to get this IFTA down.

[rank]

Scenario 1: buy fuel in ON

194 gallons @ $3.846/gallon = $746 (including $105.15 in fuel tax paid at the pump).

Tax payable based on 5 mpg:
-200 miles in Ontario = $21.68
-366 miles in NY = $28.99
-404 miles in PA = $33.04
Total owing = $83.71

$105.15 - 21.68 - 28.99 - 33.04 = $21.44 refund
$746 - $21.44
= $724.56 actual fuel cost

Scenario #2 : buy fuel in PA

194 gallons @ $3.359/gallon = $652 (including $79.35 in fuel tax paid at the pump).

$79.35 - 21.68 - 28.99 - 33.04 = $4.36 still owing
$652 + $4.36
= $656.36 actual fuel cost

Anybody? Am I doing this right? This works out to about a $15,000/yr savings.

[merrick4]

Hey Rank, that seems right to me. Don't you use a fuel routing program? Every route I take I put it in the program and it tells me the cheapest fuel. To be honest I never bothered to break it down like you just did, but after reading that I'm glad I am using this program.

Just to edit, I put in Boston, Ma to Montgomery, AL and the cheapest fuel was in Wytheville, VA at the Flying J and actually in Dublin, VA at a place called Stop In (Flying J is better as you are without a doubt going to get the 5% cash back, these other places code it as merchandise sometimes)

It was retail $3.09 and after IFTA $2.924.

The first fuel stop on the route was in Wrentham, MA where retail was $3.649 and after IFTA $3.439 and the last stop was in Clanton, AL where retail was $3.159 and after IFTA $2.969. By the way I looked at the T/A (here in Alabama 10 miles away from Flying J where it is $.20 cents cheaper)and it was $3.41. I'm sure companies get a discount but why any O/O would buy fuel here is beyond me.

I think your math really illustrates at least one reason why some will be doing better than others. I tried to tell my friend about this program I use but I think I have to show him the numbers cause I can assure you after he sees that he will pay the $25 or whatever it cost to use the fuel routing.

[Bandit102]

Yessir, Rank. You've got it right.

[no_worries]

Yep, right answer. Subtract the tax from the pump price and you've got your true cost.

[solo379]

Have I figured this correctly? Can I really save $.35/gallon by fueling in PA instead of ON?

Yes Rank! You did good! 8)

[Crash935]

Dont get caught up in the "cheapest" fuel game, watching what the taxes are for each state and playing the tax game will get you farther ahead than the cheap fuel game.

[merrick4]

Dont get caught up in the "cheapest" fuel game, watching what the taxes are for each state and playing the tax game will get you farther ahead than the cheap fuel game.

I don't know if you meant me when I used the word cheapest, but just to clarify I mean cheapest net IFTA not cheapest overall.

[RostyC]

What's the name of that program merrick? If it's online do you have a link?
Thanks

[GMAN]

You need to look at more than the net cost of the fuel when deciding where to purchase fuel. The fuel tax is what is either billed or credited to you under the IFTA agreement. For instance, I rarely buy fuel in Pennsylvania because the fuel tax is too high as is the net cost. Instead, I will usually buy in Ohio or Virginia, depending on my route. I NEVER buy fuel in New York unless it is a necessity. I can usually plan so that I don't need to buy fuel in New York. I don't want to give the state of New York any more of my money than is absolutely necessary. You can usually buy fuel in the cheaper states and come out ahead in total dollars spent. I have found that even taking the fuel tax off of the price of fuel, it can still cost less to fuel in the cheaper fuel states. I may pay a little at the end of the quarter, but will still spend less on my total fuel bill. If I am going to Chicago, I will usually fill up in Kentucky. Taxes are cheaper in that state as are the total fuel costs. It doesn't help with my IFTA to fill up in Indiana and I will not travel that much in Illinois. Before IFTA we usually stopped and bought enough fuel to get through each state. It was a bit of a pain.

[merrick4]

What's the name of that program merrick? If it's online do you have a link?
Thanks

I think the load boards have them too but I use the one offered by truckloadrate. Here's the link.


https://www.truckloadrate.com/index.htm?error=1

[Dispatch_This]

I have a different outlook on buying fuel based on IFTA taxes.. I can try to balance fuel purchases so that I have a tax credit at the end of the quarter, or I can buy fuel in states like Oregon (no IFTA tax). If I owe at the end of the quarter, then that's just like an interest free loan from the government for that 3 months. If I overpay during the quarter, then I have loaned money for free to them. It really doesn't amount to that much (unless your running 1000 trucks), but at least I can say I'm sticking it to the man, for a change.

[no_worries]

GMAN, I'm not sure I understand some of your logic. Simply by running in NY you're going to owe the state money. You'll owe them the same amount whether you buy fuel there or not. If you're trying to keep money from the individual vendors, that's a different story.

I don't know why people think IN doesn't collect fuel tax at the pump. When you buy fuel in IN they collect $.16/gallon at the pump...that's the fuel tax. There's also a surcharge of $.11/gallon that's not collected at the pump. So, for every gallon you burn in IN you owe $.27 and you're credited $.11 for every gallon you buy.

The net cost is all that matters unless you have some political or personal preference. The one exception is, as LOAD IT mentioned, large fleets. But even that amount is inconsequential.

[solo379]

for every gallon you burn in IN you owe $.27 and you're credited $.11 for every gallon you buy.

You did mean "credited $.16"?
Otherwise, i do agree with that strategy! 8)

[no_worries]

Thanks solo, that is what I meant...it's been a hectic day :?

[GMAN]

GMAN, I'm not sure I understand some of your logic. Simply by running in NY you're going to owe the state money. You'll owe them the same amount whether you buy fuel there or not. If you're trying to keep money from the individual vendors, that's a different story.

I don't know why people think IN doesn't collect fuel tax at the pump. When you buy fuel in IN they collect $.16/gallon at the pump...that's the fuel tax. There's also a surcharge of $.11/gallon that's not collected at the pump. So, for every gallon you burn in IN you owe $.27 and you're credited $.11 for every gallon you buy.

The net cost is all that matters unless you have some political or personal preference. The one exception is, as LOAD IT mentioned, large fleets. But even that amount is inconsequential.

No_worries, I understand that I will owe New York fuel tax money for miles I run in that state. However, even if you take the fuel tax off the price it is still more expensive than some of the other states. In addition, many people don't realize that we also pay sales tax on fuel purchases in most states. That is something we rarely discuss in this business. New York is one of the most anti-trucking high tax states in the nation. I prefer spending my money in states where my business is appreciated and taxes are lower. If my trucks go into New York it is because someone wants me to go more than I want to stay out. In other words, I charge a premium for crossing the state line. I don't have anything against any particular vendor. I still stop in at Jim's in Buffalo when I am in the area. I sometimes eat at their restaurant but don't usually buy their fuel. Most of the time I don't even spend the night in New York, if I can help it. I also avoid their toll roads as much as possible. I make a conscious decision to spend as little money as possible in the high fuel tax states, especially those who are anti-trucking. I suppose in that respect, you could say that my decision is political.

[merrick4]

Sales tax. I didn't think of that. Don't forget Gman the Indian fuel stops in New York. Of course I know you are not supposed to do that but if it slips by .

Actually I kind of do what you do Gman too. I am very good about where I bought fuel so sometimes if it's wicked high I will just buy it in a more IFTA expensive state but much lower fuel cost. I know in the end we still have to pay like no_worries said but I just don't like paying $3.50 for fuel and as I am good about where I fuel it all comes out even. I only paid $50 last quarter.

[solo379]

Sales tax. I didn't think of that. Don't forget Gman the Indian fuel stops in New York. Of course I know you are not supposed to do that but if it slips by .

You can do it, you just can't claim fuel tax credit, on a gallons purchased there...

[merrick4]

Sales tax. I didn't think of that. Don't forget Gman the Indian fuel stops in New York. Of course I know you are not supposed to do that but if it slips by .

You can do it, you just can't claim fuel tax credit, on a gallons purchased there...

I know, I meant if I "forget" to mention that it was an Indian place to the company that I turn my receipts in to. :wink: