Manually calculating IFTA fuel taxes involves several steps to ensure accurate reporting and compliance with the International Fuel Tax Agreement (IFTA). Here’s a step-by-step guide:
- Determine Total Miles Driven: Calculate the total miles traveled by all qualified vehicles in your fleet during the reporting period.
- Break Down Jurisdictional Miles: Record the miles traveled in each jurisdiction (state or province) separately. Use odometer readings or trip logs for accuracy.
- Calculate Total Fuel Purchased: Sum up all fuel purchased during the reporting period, including receipts to verify quantities and jurisdictions. Determine Miles Per Gallon (MPG): Use the formula: MPG = Total Miles ÷ Total Gallons Purchased
- Calculate Fuel Usage Per Jurisdiction: Divide jurisdictional miles by the overall MPG to determine the gallons consumed in each jurisdiction.
- Apply Tax Rates: Multiply the gallons consumed in each jurisdiction by its specific fuel tax rate to calculate taxes owed. Obtain tax rates from the IFTA website or jurisdictional resources.
- Account for Fuel Purchases: Subtract taxes already paid at the pump (based on purchase receipts) from the taxes owed for each jurisdiction.
By summing these calculations, you can determine the net tax liability or refund for the reporting period. Although manual calculations are possible, they are time-consuming and tend to errors. TruckX simplifies IFTA compliance by automating mileage tracking, fuel calculations, and tax reporting, saving time and reducing administrative burdens for fleet managers.
