1. Reporting BEST PRACTICES
IFTA – Dual Fuel
Reporting BEST PRACTICES   
August 18, 2016
Indianapolis, IN
Hugh Hughson (BC)

2. Overview Change in the recommended reporting methodology
Reminders (effective dates) for:
Ballot #
Ballot #

3. Original Methodology
Dual fuel vehicles must be treated and reported separately (e.g., gasoline fleet, diesel fuel fleet, LNG fleet, dual fuel fleet)
Duel fuel vehicles must be treated and reported as two vehicles (e.g., DL and DLG)

4. Revised Methodology Duel fuel vehicles are not separately reported
Dual fuel vehicles’ fuel purchases and distances travelled (after pro-rating) are added/combined with other fleets (e.g., DL is added to D, DLG is added to LNG)

5. DL Portion of a DL-DLG fleet
Original Methodology
Final Tax Return A B C D E F G H
MPG
Jurisdiction
Fuel Type
Total Distance
Taxable Distance
Taxable Fuel Volume
Tax Paid Volume
Net Taxable Volume
Tax Rate
Tax Due
Pure Diesel Fleet J1
2,000,000
303,490
200,000
103,490
0.2000
$ 20,697.91 J2
1,103,013
167,376
270,866
- 103,490
0.1000
-10,348.95
3,103,013
470,866 -
6.59
DL Portion of a DL-DLG fleet DL
320,135
300,000
20,135
$ 4,026.92
1,289,841
206,461
226,596
- 20,135
-$ 2,013.46
DLG Portion of a DL-DLG
DLG
180,000
28,812
20,000
8,812
0.0500 $
41,857
6,700
15,512
- 8,812
-$ 1,762.41
3,511,698
562,108
6.25
Pure LNG Fleet
LNG
$ -
TOTAL ACTIVITY
6,614,711
1,032,974
$ 11,040.60

6. All Diesel and LNG Reporting Combined
Revised Methodology
Final Tax Return A B C D E F G H
MPG
Jurisdiction
Fuel Type
Total Distance
Taxable Distance
Taxable Fuel Volume
Tax Paid Volume
Net Taxable Volume
Tax Rate
Tax Due
All Diesel and LNG Reporting Combined J1
D + DL
4,000,000
624,111
500,000
124,111
0.2000
$ 24,822.12 J2
2,392,854
373,351
497,462
- 124,111
0.1000
-$ 12,411.06
6,392,854
997,462
6.41
DLG + LNG
180,000
28,812
20,000
8,812
0.0500 $
41,857
6,700
15,512
- 8,812
-$ 1,762.41
221,857
35,512
6.25
TOTAL ACTIVITY
6,614,711
1,032,974
$ 11,089.25
6.40

7. Rational/Benefits Fewer dual fuel vehicles than originally anticipated
Skewing concerns previously identified are in part are related to IFTA rounding rules and can go either way
No tax return or system changes and associated costs required for jurisdictions or carriers (i.e., additional fuel types and rows)
Less complexity and fewer potential errors by tax preparers
[NEW CONSIDERATION - diesel and propane
Testing of the Worksheet “Calculations” shows financial variations ranging from 2.7% to 13.5% between the two methodologies even if the overall consumption rates are the same. However, the majority of the skewing appears to be related to IFTA rounding rules. For example:
Three decimals to two
2.061 goes to 2.06
2.065 goes to 2.07
Four decimals to two:
goes to 2.49
goes to 2.49

8. Reminders Ballot #03-2013 (CNG)
A Gallon equals cubic feet or 5.66 pounds
A Liter equals 1.0 cubic meters or kilograms
Effective Date - July 1, 2015
As per Lonette’s July 15, 2016 memo:
If needed please revise your tax rates ASAP; or
Indicate in your jurisdiction’s IFTA Footnote, your statutory CNG tax rate and units of measure, if the measures used in the statute are different than the ballot

9. Reminders Ballot #05-2015 (LNG) a diesel gallon equivalent 6.06 pounds
a diesel liter equivalent 0.73 kilograms
Effective July 1, 2017 (but please feel free to update your tax rates earlier)
There is no impact to sovereignty:
A method for restating volumes of CNG and jurisdiction’s tax rate into a different but common unit or measure for use by other IFTA jurisdictions..
Almost identical to Procedures Manual Section P1300 to convert tax rates and volume measurements between U.S. and Canadian jurisdictions.
By way of an example:
BC's tax rate is converted through a two-part process for IFTA reporting purposes (i.e., litres to gallons, and Canadian currency to US currency)
The result is BC’s tax of cents per litre for diesel set by our legislature is restated to cents per gallon for US IFTA jurisdictions
IFTA has not forced BC to change its tax rate, BC/IFTA are simply restating BC’s tax rate for others to ensure the correct reporting and distribution of taxes between IFTA jurisdictions
Consider the impact to IFTA if we all had different definitions of a gallon or liter?

10. Questions / Discussion

11. Thanks!