Help me out! Proof read my article
 

My spelling is pretty good, but grammar has always been weak. Seems as though every time I moved, grammar was coming up at my old school and already passed at the new one. The joys of public school. Anyways, I'm under a tight deadline. Editor moved up my first article from January to..... monday! What a leap!

I've chosen to talk about IFTA and how to buy fuel. It is for the company quarterly newsletter. I would really appreciate any tips, comments, grammar error fixes, etc...

Here it is:

Welcome to the inaugural column brought to you by Allan Simonson, unit 400 of Payne Transportation. The purpose of this column is to expand profit and share ideas. In this edition I'm going to attempt to explain how fuel tax works, and why you should only be concerned about the base price of fuel.

How does fuel tax work?

Every time you purchase fuel, fuel tax will be paid. This money is banked on your behalf in your IFTA account. At the end of the quarter/month, your company will calculate how many gallons burnt in each jurisdiction, and will calculate how much is owed to each out of the IFTA account. If the total amount you owe is greater than how much you've paid throughout the quarter, additional IFTA tax will be owed. If the opposite is true a refund will be issued. Whether you get a bill or a refund doesn't actually matter, the total bill is the same.

That's why how much fuel tax you pay at the pump doesn't matter. Buying fuel at truck stop A or truck stop B in different states doesn't change your total fuel tax bill, only shifts it from paying now or paying later.

How does this affect fuel purchasing?

This has a unique effect on fuel purchases. Think of your fuel purchases as two distinct units, one you're paying for the fuel, the other is simply being banked away in your IFTA account. This means you want to pay the least for the first part of the fuel price(the base price), since the second price doesn't matter. That is why we need to deduct the fuel tax when comparing prices.

If you've passed through Illinois to get fuel in Indiana, you've made a very common mistake in our industry. Fuel is far cheaper in Illinois even though the pump price suggests otherwise.

Payne Transportation supplies maps with fuel tax rates on them, updated quarterly. Use these maps to deduct the fuel tax from the pump price as follows:

Pump price - State fuel tax rate = Base price

In the next issue, I will address cross border fuel price calculations, how to lower your total fuel tax bill(there are only two ways, increased fuel mileage or changing your routing), among other things. Any tips/comments/flames/ideas drop me a line at (email address removed).

Allan, I think you have explained a very confusing concept very well. Many o/o have no idea how this is done. Except to explain how fuel tax is calculated, usually based on miles travelled in each province or state I think you've done a very good job. Also, it seems that your grammar is pretty good. You have been direct & to the point. That's all that's necessary.

Just my 2 cents worth!

Thanks for the tip!

BTW this guy:

Mullen :: Corporate Responsibility -

and this guy:

Payne Transportation -"No Payne No Gain"

Will be "approving" my article.

does the column have a name? After introducing yourself, tell us something about yourself. don't brag, just something brief. why were you chosen, what are your unique qualifications?


"the purpose of this column is to expand profit and share ideas" rework this. how about .....the purpose of this column is to share our experience and knowledge to expand profits?

...your company will calculate how many gallons burnt? shouldn't this be bought? if so, purchased is a better word. if not, then do you mean burned?

remove the line there are only two ways, increased fuel mileage or changing your routing it gives away the jist of the next article and contributes to a run on sentence.

HTH :)

I wasn't sure how to put that across, and kept changing the damn sentence.

Used is the correct term, not bought.

I wasn't sure if I should or not.

also it might be a good idea to give real life examples of fuel prices in different states that illustrate your principle. are there any others you can show in addition to indiana and illinois?

i do like it so far, just a couple minor tweaks here and there. :thumbsup:

There is Florida and Georgia. I used Indiana and Illinois because it is both an extreme example, and an example that our drivers use regularly. A couple sentences there should be reworked though, sounds condescending.

Well I polished the turd up and this is what I ended up with(although it's probably too long):

Welcome to the inaugaral column, written by Allan Simonson, Unit 400 of Payne Transportation. Before I get started, let me tell you about myself. I have worked for Payne since January 2009 and have 6 years of experience as an owner/operator. Although I may not be an expert on the industry, I do take a scientific approach to many aspects of the industry. To say 'I'm a numbers guy' is an understatement.

The overall purpose of this column is to share our collective knowledge, hopefully resulting in increased profit. In this edition I am going to explain how the International Fuel Tax Agreement (IFTA) works, and how to use the base fuel price to your advantage.

How does IFTA work?

Every time you purchase diesel, fuel tax is paid. This money is banked into an IFTA account that is assigned to your unit. At the end of the quarter/month, your company will determine the total amount of gallons consumed in each jurisdiction. They will then calculate the amount owed (gallons consumed X fuel tax rate) from the IFTA account. If the amount owed is greater than the amount you have paid throughout the quarter, additional IFTA tax will be charged by the carrier; if the amount owed is less, a refund will be issued. It does not matter if you are billed or refunded because the total fuel tax paid will be the same regardless of where the fuel is purchased. Review your monthly fuel tax report to better understand the figures and calculations.

How does IFTA affect fuel purchasing?

The cost of fuel at the pump is broken into two separate units: the base price and the fuel tax. The base price is the cost of the fuel without tax. Ideally, you want to pay the least for the base price, because the fuel tax does not matter in the long run. When comparing prices, you should deduct the fuel tax from the pump price(i.e.; pump price - state fuel tax rate = base price). Payne Transportation supplies maps with fuel tax rates (updated quarterly).

A common mistake is to buy fuel in Indiana after passing through Illinois. Fuel is far cheaper in Illinois even though the pump price suggests otherwise. Another good example is Florida and Georgia.

In the next issue, I will give real examples of fuel cost savings using this fuel purchasing method, I'll show how to lower your total fuel tax bill(there are two ways) and how to compare cross border fuel prices. If you have any column ideas, comments, or questions, contact me at (email removed).

I like the second version better. Especially the introduction, it seems to qualify you as someone worth listening to. I think it reads very well. The last paragraph leaves me wanting more, anticipating that next issue.

Needless to say, although it was my ideas in the article, it was basically completely revamped by someone who does it as side projects.

Years of trucking has caused my brain to rot.

I also have to say that I understand IFTA doesn't work exactly the way the article explains it. However I've found this way (the magical bank account that doesn't really exist) the best way for people to understand it. Any other way simply doesn't work as well. It's a good concept, so I stuck to it.

Congratulations on getting your own column Allen. I think it's a fine article and fuel tax is something I need to pay more attention to now that I'm going out more.

Here have one of these........ :clap:

But where oh where is the local grammar/sentence structure nazi's?

You guys know who I'm talking about!

Allan, grammar & sentence structure is not the point of the article. You have written it so the "average guy"...read truck driver... can understand a confusing concept. I struggle with this EVERYTIME I go through BC. They're fuel tax is DOUBLE every other place I go. I CRINGE everytime I stick the fuel nozzle in my tanks! BUT, I have also come to understand that if I DON'T fuel there I will have a HORRENDOUS fuel tax bill every month!

Here's my example...

Trip to Whitehorse from Edmonton...

Alberta Fuel tax: 0.09/litre
BC Fuel Tax: .18/litre
Yukon Fuel Tax: 0.07/litre

Miles travelled in Alberta: 343
Miles travelled in BC: 650
Miles travellled in Yukon: 230

Alberta fuel price: .70/litre
BC fuel price: 1.10/ litre
Yukon fuel price: .85/litre

Guess Where I WANT to fuel?

And the real kicker...for me at least is that I have very large fuel tanks & I get pretty decent fuel mileage...around 7 mpg most of time...I can fuel in Edmonton & don't NEED fuel till I get to Watson Lake, Yukon. Believe me .... IF I could find a way to bypass BC... I would... in a HEARTBEAT! But until I can find a way for my truck to fly or they build a road from Alberta to the Yukon that goes around BC I'm saddled with it....there IS, unfortunately only ONE road where I travel!

Sent it away and got this response:

"Article was really good, no changes necessary.
Have a great day :)"

Ahem..... well..... I don't know who you refer to, but I wish I'd seen this earlier. ;)

I DID have a few suggestions, but obviously I missed the deadline. The most important one was this: Alan. OBVIOUSLY you don't realize that there is only ONE "L" in Alan. :lol2:

Seriously, it was a GOOD essay, even in its original version, and like KAT said..... didn't really HAVE to be perfect. But, you DID want it to be, right? I wouldn't worry too much about your grammar. It is way above average.

Not being an O/O, I certainly learned something from your article and I'm sure your coworkers did. IF you still want to see how I would have "edited" it, I'll be happy to oblige. But, it's past the deadline now.

One thing I DID key on though.... you said there are only TWO ways to affect your fuel TAX bill. I hesitate to disagree, but would like to further discuss it before you publish your next article.

Sorry I was under an extremely tight deadline, and I was hoping you or the Rev would chime in. The article isn't published yet(another week or so) but I'm sure we're way beyond the point of no return. The next one will be for the 4th quarter end, I'll start it in early December or so.

As far as fuel tax is concerned, there are two ways. How much fuel you burn and where you drive(routing). Sometimes I'll take a slightly different route that goes through a cheaper fuel tax state.

The fault is mine. I've neglected this forum lately. I only wound up here today due to a link about that CSA2010 stuff.

I said I "hesitated" to disagree mostly because I haven't had time to fully research or digest the info as you presented it about IFTA and fuel tax rates. I filled out the forms as a company driver, but never had to deal with the economic realities. This is something I NEED to get a grasp on, and I appreciate learning it from you.

If I understood the original article correctly (although I was mostly reading for grammar and stuff,) your point is to pay more attention to fuel tax BASE PRICES rather than TAX RATES. We all know that taxes USUALLY are just lost income. However, I'm not clear on one point.

Is the total amount of fuel tax paid during a month/quarter divided up EQUALLY among the states based on mileage in those states? Or is it apportioned by mileage FACTORED BY PERCENTAGE RATE?

Let me try again. If you pay HIGHER tax rates in Indiana than in Illinois, but LESS basic fuel price in Illinois, YOU say one should fill up in Illinois. Now... it SOUNDED like you also said that the amount PAID to each state you pass through was the SAME based on mileage. Is that right?

If so.... why go around that state due to higher TAX rates that you say are immaterial. (You may get a refund or owe more) It seems the only reason to bypass a state would be the BASE price of the fuel.... and THEN only if the extra mileage offset it AND you couldn't have "pre-fueled" to get through it. :confused:

Seems to me.... one of the factors for your aticle MIGHT should be JIT fueling (my version of "just enough" to get out of the state.) If the ONLY real factor is BASE price..... then plan your trip for the SHORTEST distance, and fuel where the BASE price is lowest. If you run out before you cross the border..... well..... you just SHOULDN'T! Top it off BEFORE you enter the state with the higher BASE price. (instead of routing AROUND a state with a higher TAX RATE.)

I may be way off base. I'm shooting from the hip. But YOU SAID in your aticle that the actual TAX RATE doesn't matter as it will all come out in the wash. NOW you are advocating a LONGER route to avoid a TAX RATE? :hellno:

Golf you're already getting into a bit of advanced fueling concepts. You simply want to buy fuel at the cheapest base price, but do your miles in the cheapest states. The problem is exactly like you stated, usually the cheapest "base price" fuel is in the high tax rate states. You want to buy fuel there but you don't want to travel there.

But imagine buying fuel in Indiana, AND traveling in Illinois? For example:

IN fuel tax rate is 16 cents
IL fuel tax rate is 43.4 cents

We'll ignore the surcharge just to make things easier.

The fuel price at Minooka, IL is $2.919, base price $2.485
The fuel price at Gary, IN is $2.699, base price $2.539

If you get 6 mpg and fueled up in Minooka, Illinois the numbers would be:

Illinois $2.485 + $0.434 = $2.919/gallon 48.65 cpm total cost
Indiana $2.485 + $0.16 = $2.645/gallon 44.083 cpm total cost

If you fueled up in Gary, Indiana the numbers would be:

Illinois $2.539 + $0.434 = $2.973/gallon 49.55 cpm total cost
Indiana $2.539 + $0.16 = $2.699/gallon 44.983 cpm total cost

So you save 1 CPM just by fueling up in Illinois. Remember that your base price is "paid and done for" yet the tax rate changes every state line you cross. So every time you cross a state line your actual costs change. It's always base price at last fillup + fuel tax rate of current state you're in.

It is based on fuel used in each state, which is based on mileage and average MPG for the reporting period. Going back to Illinois/Indiana:

Say you did 500 miles in each state and averaged 5 mpg. That's all you did for the month. The reporting period comes, and you tally up your miles. You did 1000 miles, 500 in each state, and averaged 5 MPG. Therefore you burned 100 gallons in each state. You "owe" Indiana $16, and you "owe" Illinois $43.40.

If you bought all of the fuel in Illinois, you would receive $27.40 back(200 gallons X $0.434 fuel tax rate = $86.80 paid through the quarter, but you pay Illinois $43.40 and Indiana $16, $86.80 - $43.40 - $16 = $27.40).

If you bought all of the fuel in Indiana, you would owe $27.40(200 gallons X $0.16 fuel tax rate = $32 paid through the quarter, you pay Illinois $43.40 and Indiana $16, $32 - $43.40 - $16 = -$27.40)

But wait, we need to calculate how much you actually paid overall:

Illinois you bought 200 gallons, and paid $2.919 = $583.80

$583.80 plus your IFTA return of $27.40 = $556.40 "total" fuel cost

Indiana you bought 200 gallons, and paid $2.645 = $529

$529 plus you owed IFTA $27.40 = $556.40

There are two was to calculate total fuel cost:

Pump price paid throughout quarter - IFTA return(negative if owed, resulting in addition of the number) = Total fuel cost for quarter

Base price paid throughout quarter + all fuel tax paid = Total fuel cost for quarter

Both should come up with the same number.

Here's what they kept:

Cut out the first two and last paragraph. Oh well, they did include an "editor comment" that included my email address. The newsletter should be online very shortly. They put my article in a side bar.

Thanks everyone.

This is great! I have no earthly idea what you are talking about, but it sounds GREAT!

I liked this part. Too bad it didn't make the final cut. http://i97.photobucket.com/albums/l2...nd10/shrug.gif

Here it is:

http://www.paynetransportation.com/P...letter_Web.pdf

page 7 right side.