My parents were experts at shifting the narrative. Just by changing a word or two, they could alter the perspective on whatever my brother and I were getting into at the time.
“How come when you don’t want me to do something I’m only 12,” my brother would ask, “but when you want me to do something, I’m nearly 13?”
Some questions have no easy answer. They require a lot of thought, and sometimes the narrative shifts right when you think you have things nailed down.
I see this all the time in fleet tax compliance. And not unlike my mother, I often find myself telling people, “It depends.”
“It depends” is a pretty standard response in the fleet tax world. Rules for fuel taxes, permits, registration fees, and other obligations vary depending on where you operate, the gross vehicle weight rating of your equipment, and the type of freight you haul.
Here are 5 questions that you might not know that you don’t know:
1. Do I have to pay sales tax on my equipment?
Sales tax on equipment, repairs, and other services is charged at the provincial and state level. Though you may not have a choice, when you are choosing a base jurisdiction for apportionment (prorate) and IFTA, you have to consider sales tax.
Vehicles may be exempt from sales tax in their base jurisdiction but you may owe tax to other jurisdictions they travel to. If you live in a PST province like British Columbia, Saskatchewan, or Manitoba, this is called a prorated vehicle tax. Many states call it ad valorem or third structure tax.
If you’re traveling to a PST jurisdiction on a single trip permit, will you have to pay sales tax, and if so, how much? It depends.
I get this question from Alberta-based carriers once they realize that their single trip permit doesn’t include the PST that B.C., Saskatchewan, and Manitoba want to collect. They risk owing big bucks and spending a bunch of time with an auditor sorting out how much distance their vehicles covered in each jurisdiction, how many days their equipment spent there, and how much sales tax they paid on their equipment.
2. How much will my plates cost?
Any fleet with a registration year beginning on or after Jan. 1, 2015, is subject to FRP (Full Reciprocity Plan) provisions under the International Registration Plan. With FRP, your IRP cab cards list all 59 member jurisdictions along with the proper registered gross weights for each of those jurisdictions.
If you’re a new fleet, you have no actual distance to report when you get your cab card. You’ll use your base jurisdiction’s APVD (Average Per Vehicle Distance) chart to determine your fees.
If you’re an existing carrier renewing your fleet, you report actual distance accumulated during the distance-reporting period (July 1-June 30). And this is where it gets tricky.
“Report all actual distance” means all distance. Even if you have just one day of travel in the distance-report period, that is what your percentages will be based on for your renewal fees.
Carriers that start new fleets in April, May, and in particular June, are most at risk of having results that are not representative of their normal travel patterns for a year. The actual distance you travel in those three months could cost you money, or it could save you money when you renew your plates. It depends.
3. I’m Canadian. Do I have to pay U.S. Heavy Vehicle Use Tax?
It depends on your registered combined gross vehicle weight and how far you travel between July 1 and June 30.
All carriers with a registered combined gross vehicle weight greater than 54,999 pounds and/or if you travel more than 5,000 miles in the U.S. between July 1 and June 30. If both are true, then yes, you have to pay HVUT regardless of whether or not you are Canadian.
4. Will the Safety Fitness Certificate issued by my home jurisdiction be accepted by other provinces and states?
Canada’s Motor Vehicle Transport Act requires all persons registering an extra-provincial “regulated vehicle” to obtain a Safety Fitness Certificate from their home provincial authority. This certificate is proof that you have a “satisfactory,” “satisfactory unaudited,” or “conditional” safety rating under the National Safety Code, and that you have at least minimum liability insurance coverage.
Your Safety Fitness Certificate will be recognized by other Canadian jurisdictions. But if you operate in the United States, you’ll need the right authority.
In general, companies that haul for-hire freight in the U.S. need an interstate operating authority. The type of authority you apply for will affect the type and level of insurance required by FMCSA. First-time applicants who have never registered with FMCSA before and have not been issued a USDOT number also need to register via the FMCSA’s Unified Registration System.
If you’re a U.S.-based carrier traveling to Canada, your USDOT number will be recognized in all Canadian provinces with the exception of Ontario and Quebec. If you travel to those two provinces, then you have to apply for their respective safety fitness programs.
You see, it depends.
5. Can I use the GPS data collected by my ELD to report IFTA?
This is tricky. Read carefully.
Yes, you can use GPS data collected by your ELD to calculate distances for IFTA reporting.
But the rules that pertain to IFTA and fuel tax reporting are very different from the rules covering driver hours of service. Remember, an ELD is required to provide a record of the driver’s activity. IFTA requires a record of the truck’s distance traveled and fuel consumption.
Here are three important things to remember about ELDs and reporting distance for IFTA:
- GPS devices are generally accurate but not perfect. You have to check your GPS data for gaps in time and location reporting. IFTA auditors will expect that you have done this.
- A driver can be in multiple trucks in a single day and his duty records have to stay with him. Are you sure the distance reports from the ELD’s GPS is associated with the right vehicle?
- Under IFTA, you are required to keep original data to support your returns for four years; for IRP the requirement is as many as 6.5 years. For hours-of-service compliance, you have to keep records for only six months. Don’t let someone purge the data you need for IFTA and IRP because it’s no longer necessary for HOS. Know where your data is kept and for how long.
The bottom line is that you can use GPS data from your ELD for IFTA and IRP distance reporting. Whether you should just depends on how diligent you—and your ELD provider—are about your records.