With 11 states showing a tax rate change, the Q3 IFTA return due date is October 31st.
What are the 2020 IFTA tax rates for the 3rd quarter?
The International Fuel Tax Association (IFTA) has released the 3rd quarter 2020 fuel taxes. You can download the full list of 2020 Q3 tax rates below and can also find more information on the International Fuel Tax Association at their website.
Which states had IFTA tax rate changes?
There were eleven states that showed a tax rate change, which include California, Illinois, Indiana, Iowa, Maryland, Michigan, Nebraska, New York, South Carolina, and Virginia. IFTA lists the 3rd Quarter 2020 Tax Rate Changes, which will go into effect on July 1, 2020.
Managing IFTA requirements can be challenging. Between tracking receipts, managing mileage logs, matching fuel to taxes, chasing drivers and filing with the jurisdictions, it is easy to see why many companies search out solutions for the complicated process.
When are your IFTA taxes due?
The IFTA return due date for the 3rd quarter is October 31st. Take a look below for a list of IFTA fuel tax reporting for the each quarter.
- 1st quarter (January to March) — April 30
- 2nd quarter (April to June) — July 31
- 3rd quarter (July to September) — October 31
- 4th quarter (October to December) — January 31
CNS takes your fuel tax reporting worries away!
CNS is a full-service tax provider that can manage the entire process for you from start to finish and offers custom simple solutions for companies of all sizes.
Our fuel tax specialists will work with you to collect your data, ensure your fuel and mileage match, prepare your filings, and even file the paperwork for you directly.
Are you prepared for an IFTA Audit?
When it comes an audit, the best defense is a great offense. And the best offense is knowledge.
Knowing what will happen in an audit and being prepared with sufficient record-keeping will keep you ready for an audit at any time.
We have interviewed Adam Galante, our Vice President of Operations, to talk about electronic record-keeping requirements for an IFTA audit.
Tracking system requirements for an IFTA Audit
What are the requirements for the different tracking systems available to carriers?
When using a GPS tracking system, there are several data points you want to be sure are recording accurately.
The required data sets for an IFTA audit are:
- date and times
- the odometer or the ECM reading or hubometer reading
- longitude and latitude readings for each ping
In addition, carriers need to ensure the readings are made in a sufficient manner, at correct intervals, and readings must be recorded to the fourth decimal point.
What is a sufficient interval for recording GPS data?
The GPS needs to ping at intervals of less than five minutes. Be sure the tracking system you are using is set to this interval.
Also, consider various factors about the routes drivers take, by asking questions like:
- what is the distance the driver will be traveling?
- is it a short or long route? Are there a lot of hills or is it mostly flat?
- how often are drivers crossing state lines?
- is the GPS tracking system proper geofencing around the different states?
Note: Geofencing needs to map the entire state all the way around.
What would be considered inadequate or insufficient data recording?
An IFTA auditor will look for several factors when evaluating electronic record-keeping from the GPS tracking system.
IFTA auditors will check:
- if the GPS is meeting the interval of less than 5 minutes for every ping
- if the GPS tracking system is using proper
- For example, if the geofencing isn’t mapping the entire state all the way around, your data will be inadequate.
- if the odometer readings put into the GPS match the odometer on the vehicle
- if longitude and latitude lines aren’t recorded to the fourth decimal point
If you want CNS to perform a mock IFTA audit, we can tell you if you are in compliance.
What should carriers look for when purchasing a compliant tracking system?
Make sure the tracking systems can record the sufficient data points, as mentioned above.
In addition, GPS tracking systems should be able to:
- set recording intervals to under 5 minutes – this is very important!
- record time stamps for each state crossing
- record longitude and latitude for every ping to the fourth decimal point
- know how the provider is accumulating their unknown miles and providing that information to you.
What are the most common reoccurring problems in processing fuel taxes?
When auditors process fuel taxes, they often come across these five error points:
- bad GPS data
- insufficient GPS information coming through
- GPS pings are not set to the correct intervals of less than five minutes
- broken GPS hardware
- once it’s broken the data normally can’t be retrieved
- poor fuel tax reporting
- faded, unorganized fuel receipts or fuel purchase pre-authorization slips that cannot be read.
If you can resolve these fives common fuel tax issues, you will be well-prepared for an IFTA audit!
Read our previous blog post for more tips on Surviving an IFTA Audit.
IFTA Fuel Tax Service
Keep your electronic record-keeping accurate with CNS Fuel Tax Service
The fuel tax service at CNS stands out because it offers carriers these benefits:
- secure data storage with a portal login
- experts familiar with IFTA audits and GPS tracking systems
- affordable pricing that will work for any business
The thought of an audit should not scare you if you are prepared. Use your electronic record-keeping as a resource to keep you prepared for any inspection or audit situation. When your records are accurate and secure, your business will be too!
With all of the IFTA and IRP audits, Compliance Navigation Specialists, Adam Galante and Chris Kiehl, talk about Electronic Record Keeping Requirements to stay compliant.
Have you ever been through an IFTA audit?
If you haven’t been through one, would you be stressed if you received a call or a letter stating you are due for one?
We have helped many clients through IFTA audits. If you are keeping accurate mileage and fuel receipts, you have nothing to worry about. But sometimes that is easier said than done.
Clients have contracted with Compliance Navigation Specialists (CNS) to complete a mock audit or represent them in an actual audit and have come across some common problems.
Read our blog post on What to expect and how to prepare for an IFTA Audit
Some of the more frequent challenges and how to avoid them, include:
- The first common problem we come across has to do with fuel receipts.
- It is important to know that drivers must provide documentation proving the miles they ran, as well as the fuel purchased. Often times drivers are either missing fuel receipts or using a credit card that doesn’t show gallons purchased.
- We have even witnessed a client bringing their fuel receipts down from their attic and open up the box to find that the heat erased the ink on the thermal receipts. All of these issues cause challenges in an IFTA audit and can be prevented.
Our recommendation: Obtain a fuel card to keep accurate records of fuel purchased per gallon per truck.
- When it comes to miles, the main problems we see are missing trip sheets, inaccurate mileage recorded by the driver, or inaccurate mileage for a GPS system.
- Drivers are responsible for ensuring their GPS is reading the odometer mileage and working consistently.
Our recommendation: Make it a habit of testing the GPS system periodically to ensure it is working properly. If the GPS system fails for any reason, the driver must recreate their trips to complete their taxes.
- Drivers are required to keep supporting records and documents for four years from the tax return due date or filing date (whichever is later) plus any time period included as a result of waivers or jeopardy assessments. If a driver is reporting their IFTA taxes wrong or is just bad at record keeping, they could get hit with back taxes and interest.
For example, if a driver is bad at record keeping and can’t prove their mileage, the state has the right to calculate their miles per gallon by 4.0 mpg. This can cause serious back taxes, plus interest. In Pennsylvania, a trucker challenged the 4.0 mpg factor in Nedeljko Gunjak, Inc. v. Commonwealth, docket no. 455 F.R. 2013. The Pennsylvania Commonwealth Court has denied the appeal of a motor carrier’s assessment for additional fuel use tax that was more than $300,000 under the International Fuel Tax Agreement. Due to the carrier’s absence of records that IFTA requires a motor carrier to keep, the state, following an audit, had imposed a 4.0 miles-per-gallon factor on all the carrier’s operations, and made such other audit adjustments as were warranted by the best information available. The taxpayer’s argument was that they presented the required records. PA court said that the records the carrier had shared were so obviously inaccurate as to preclude any reliance. While this finding is by no means novel, it is a good time emphasize how important it will be when a carrier faces an IFTA audit that its records be reasonably complete and accurate.
Our recommendation: Contact one of our IFTA Specialists to discuss the tools and management processes to keep you in compliance with IFTA. So, if you do get notified of an IFTA audit you will not have to worry.