fuel tax explained

[1-Up trucker]

srry to be asking all these questions in separate threads, still a rookie lol.

i have been getting more and more bored lately and was just the other day flipping through my atlas and noticed the fuel tax page.

I saw the chart, but still dont understand it completely.

also, I have been told to buy fuel at each state i drive through, and then I have been told to skip as many states as i possibly can with the fuel I have in the tanks.

can someone explain all of this to me in a manner that makes sense?

[mgfg]

Each state has a fuel tax on every gallon of fuel they sell. The fuel tax is used to build new/maintain existing roads. Tax paid is based on the number of miles your run each quarter in each state, the amount of fuel you bought in each state and the tax rate in each state.

Let's do some simple math to show you how it works.

You run 1000 miles in Texas for the quarter and your fleet fuel economy average is 5 miles per gallon and the Texas tax rate is 10 cents per gallon.. In to have paid your tax on purchased fuel you would have to have bought 200 gallons of fuel. If you didn't buy the 200 gallons (or more) then you would owe Texas $20.

IFTA has made doing fuel tax much simpler as now if you owe Texas $20 you may have a credit coming from a different state. IFTA allows you to file your quarterly fuel tax report useing ALL your miles, ALL your fuel purchases and doing the math doing one report. You send a check for tax owing/collect the rebate to your home IFTA state and they send the money to the states you owe and collect the credits from the states that owe you.

Don't worry about fueling in every state. Unless your employer tells you where to buy/not to buy fuel just buy fuel when you need it.

[Orangetxguy]

srry to be asking all these questions in separate threads, still a rookie lol.

i have been getting more and more bored lately and was just the other day flipping through my atlas and noticed the fuel tax page.

I saw the chart, but still dont understand it completely.

also, I have been told to buy fuel at each state i drive through, and then I have been told to skip as many states as i possibly can with the fuel I have in the tanks.

can someone explain all of this to me in a manner that makes sense?

Your IRP taxes are paid in part, by your fuel taxes.

In theory, you should buy enough fuel to cover the taxes for the miles you travel in each state. Now......IF you stop in every state you travel thru each day (EXCEPT TEXAS and north/south in California), you are going to be stopping to much....more importantly....if you are using a fuel card like most of us do use...you are going to be needlessly wasting YOUR money (that $2.50 a pop!). What you need to do is keep a record of your fuel purchases by state....and a record of your mileage....by state. Over the course of the year...plan your fuel purchases to pay the taxes for your states most traveled. States like Oregon and Kentucky, where they charge by the mile, you do not need to buy so much fuel in........and remember....if you buy a ton of fuel in Oregon because they do not charge taxes.......You are going to OWE road taxes to those states you don't buy so much fuel in (because of fueling in Oregon) at the end of each quarter (WA, ID, and UT mainly).

addendum;
What mgfg posted.....that is the proper "theory" behind the taxes....but you still need to know the mileage you run in each state. You gotta keep track of everything.

[no_worries]

The name of the game is keeping as much money in your pocket as possible. There's only one way to do that; pay the lowest net price you can find. Net price is the price you pay minus the state tax. Say you're going from Indy to Milwaukee. The pump price at the TA in Gary is 3.759, the Chicago North TA is 3.879, and the Petro at Racine is 3.979. Where do you fuel? Subtract each state's fuel tax from the price and you'll find that fueling in IL is .07/gallon cheaper than IN and .121/gallon cheaper than WI. Don't worry about what states you drive in and don't worry about whether you get a refund or write a check each quarter. Those things don't matter when it comes to keeping your money.

[rank]

from 2009:

Ifta

[xcarsalesman]

[QUOTE=rank;500860]from 2009:

Ifta[/QUOTE Is there a website , where you can see states fuel taxes?

[no_worries]

IFTA, Inc.

[azcardnlz]

It amazes me that the old advice to "buy a little fuel in each state you drive in" is STILL out there. That was sound advice...before IFTA. Now, it is totally unnecessary. A tax surplus in one state will now automatically cover a deficit in another state. And if you wind up owing more at the end of the quarter, one payment is all that's required. If you follow the advice to factor out the state's fuel tax, and buy the cheapest fuel you can, you will likely find that you are due a refund more times than not.

[aubie2]

Mississippi was bad about stopping you as you left the state to see your receipt for fuel purchased. If you did not buy any, they would calculate what you owed and you would pay on the spot. I remember others, but that one stuck out.

[mgfg]

Mississippi was bad about stopping you as you left the state to see your receipt for fuel purchased. If you did not buy any, they would calculate what you owed and you would pay on the spot. I remember others, but that one stuck out.

As I recall Mississippi had a two tiered system. They had red and green fuel tax stickers. One colour meant you had a tax account with the state, the other colour meant that the scale/dot man should charge you the tax when you crossed the scale.

[crazyeyes]

The name of the game is keeping as much money in your pocket as possible. There's only one way to do that; pay the lowest net price you can find. Net price is the price you pay minus the state tax. Say you're going from Indy to Milwaukee. The pump price at the TA in Gary is 3.759, the Chicago North TA is 3.879, and the Petro at Racine is 3.979. Where do you fuel? Subtract each state's fuel tax from the price and you'll find that fueling in IL is .07/gallon cheaper than IN and .121/gallon cheaper than WI. Don't worry about what states you drive in and don't worry about whether you get a refund or write a check each quarter. Those things don't matter when it comes to keeping your money.

I use same formula, works out best for me.