IFTA Non-Receipted Fuel Adjustments Presentation for IFTA ABM August, 2013 Reno, NV

Panel Sandi Ackerblade (ON) – APC Rich Wagner (NV) - PCRC Barbara Musick (Industry) – FADV Sandy Johnson (Industry) – North Star Fleet Solutions

Please people… Let us pay you what we owe you!

Issue Some jurisdictions will not accept adjustment and/or non-tax paid fuel – Missing receipts, Indian Reservation purchases, unacceptable receipts Misconception that total fuel and total tax paid fuel has to balance. Has become more of an issue with electronic returns. Have to have allow for adjustment fuel or correct amount of tax cannot be paid.

History… Has been a common misunderstanding for a number of years Becoming more prevalent with the use of e- file for quarterly reporting – Can’t change with the stroke of a pen Happens quarter, after quarter, after quarter – Need to be able to accept the data as filed without continuous follow-up

What is the concern? Who requires that tax paid gallons/liters equals total gallons/liters? Do you know if you even have this issue?

Research Our research discovered that there are at least eight (8) jurisdictions where tax returns are not accepted as filed if total fuel does not match tax paid fuel. Includes both paper and e-returns.

The Result of non-acceptance It creates an increased amount of work – File the return with the non-IFTA fuel and a check. – Wait to see if it is accepted. – Check and return in most cases sent back to carrier (service bureau). – Carrier doesn’t want to cash the refund check issued because they know they’ll have to pay on audit. Plus penalty, plus interest.

What is the cost? Example #1 - regular tax return (total fuel = tax paid fuel) DistanceTotal FuelPurchaseNet TaxTax RateTax Due A116, ,2071, $ A224, $ A35, $ A48, $ A535, , $ (944.23) Total89, ,9231 $ (28.39) MPG:5.01

What is the cost? Example #2 - pulls out 25% non-tax paid fuel in A5. Total still equals Tax Paid DistanceTotal FuelPurchaseNet TaxTax RateTax Due A116, , $ A224, $ A35, $ A48, $ A535, , $ (448.43) Total89, ,4498 $ (1.16) was: gallons took out of total fuel by jurisdiction. MPG:5.81

What is the cost? Example #3 still includes the 2474 A5 gallons into total fuel. DistanceConsumedPurchaseNet TaxTax RateTax Due A116, ,2071, $ A224, $ A35, $ A48, $ A535, $ (130.28) Total89, ,4492,475 $ MPG:5.01

In Summary Effect on individual jurisdictions vary: 1) If the jurisdiction is owed tax, they always lose tax that is due 2) If a jurisdiction is owed a credit, they are always credited too much tax.

In Summary (2) Jurisdictions aren’t getting their share of tax Auditors have to deal with it Industry wants to pay, but can’t – Pay more through penalty and interest

How jurisdictions handle this Most jurisdictions allow for this and here is how…

Start of discussions IAC meeting in Indianapolis discussed ballot #01_2013 as possible way to address this – Seems to be a problem with e-file – Problem may get worse as more jurisdictions e-file Start discussion to see how to approach Approached the Ballot sponsors

Continued Discussion Had a number of meetings with APC, PCRC to discuss possible solutions. Formed a sub-committee Verified that there seems to be a problem and would like to address it. Kicked around a bunch of ideas. Came up with some potential strategies.

Potential Strategies Amend Ballot #01_2013 FTPBP P700 APC-PCRC-1.pdf Amend to include P710 –.600 Total number of Non-IFTA or non-tax paid gallons or litres New Ballot - P710 – Gives jurisdictions flexibility of where to put the additional fuel – Allows for flexibility in programming Training & information sessions – IFTA/IRP Managers; IFTA/IRP Audit Workshop?

Point us in a Direction How would you see this process being improved? Questions/comments?

IFTA Non-Receipted Fuel Adjustments Presentation for IFTA ABM August, 2013 Reno, NV