Ever heard of Pete Seeger?
You probably know a few of his songs, “This Land Is Your Land”, “Where Have All the Flowers Gone?”, “We Shall Overcome.”
Just the other day, I was humming “If I Had a Hammer” after my laptop started acting up. Seeger was an American folk singer and songwriter who grew up during the Great Depression and whose life was shaped by injustice and hard times. One my favorite Seeger quotes is about the difference between education and experience. “Education,” he said, “is what happens when you read the fine print. Experience is what you get when you don’t.”
Fleet Tax Compliance
With fleet tax compliance today, there’s not enough education going on and people are having a bad experience as a result. Let’s look at one area in particular: using GPS and electronic data for IFTA, IRP, and other distance-based taxes.
The industry’s experience with GPS reminds me of where I was at with computers 30 years ago. I got my first taste of technology and trucking in the mid-1980’s when a friend showed me what a PC could do. It was a revelation—a miracle compared to the calculator and paper spreadsheet I was using to complete fuel tax returns. I learned about computers through trial and error. Sometimes I had great results. But my experience wasn’t always what I hoped it would be.
For instance, I loved that I could do complex calculations quickly and with fewer mistakes, but then I had to figure out how to manage the massive volume of data I was creating. I made trip summaries and other statements that were helpful to me, but they were meaningless to my friends at the provincial tax and licensing office who still wanted to see paper logs, trips sheets, and fuel receipts.
By then I had plenty of experience. What I really needed was an education. Unfortunately, there was no “fine print” about electronic records and fleet tax compliance back then. Luckily, I met others in my line of work who were doing similar things. We shared what we knew and learned from each other.
Like me and my first computer, the gee-whizzy factor of GPS and transportation management systems—“You mean I can see where my trucks are every two minutes?”—is wearing off fast. Everyone I know in fleet tax compliance has experience with GPS and tracking software. Now they want expertise to make their investment pay off.
Case in point, consider a recent email I got from a company looking for clarification on GPS data and IFTA reporting: We are using a GPS tracking system that calculates distances driven, and our hand- calculated distances (based on odometer readings) are always greater than the GPS distances. They’re not off by much, usually less than 200 km per 10,000 km driven.
What are the accepted differences in odometer readings vs GPS distance by IFTA?
Distance calculated using GPS is typically 2 to 2.5% less than distance based on odometer and hubodometer readings. Why? There are several possibilities, including worn-out drive tires throwing off the odometer, or GPS pings that are too infrequent. What should you do when your electronic and manual calculations disagree? IFTA accepts both GPS and odometer/hubodometer readings as “acceptable distance accounting systems.”
Producing raw GPS data, trip records with odometer readings, and an explanation why there’s a discrepancy will help but the auditor has final say. In the end, his or her job is to determine whether your accounting system produces accurate and reliable results, and to make sure you have records to support your claims. It doesn’t matter whether you generate your data electronically or by hand as long as you’re consistent.
When it comes to electronic data and fleet tax compliance, a lot of fleets aren’t getting the education they need. They think “having GPS” is enough. They’re putting hardware and software in place without regard for what the fine print says about fleet tax compliance. In some cases, the fine print has yet to be finalized. As we approach the end of the calendar year, it’s a good time to learn the rules and procedures surrounding electronic records and fleet tax compliance. Find an expert to help you with training. The education you receive will make your overall experience better.
A lot of this can seem hard to navigate. So many boxes to check and steps to take. We want to help.
Please take a moment to take a look at our Free Fleet Tax Compliance Toolkit.
This tool kit is made up of these invaluable resources and tools:
- Fleet Tax Compliance Guide (7 Critical things you need to know about Fleet Tax Compliance)
- [VIDEO] IFTA Fuel Tax 101
- Driver Trip Report (Excel Spreadsheet Template)
- How To Use the Driver Trip Report
- GPS Reporting & Checklist
If you have any questions regarding IFTA regulations or protocol, please reach out to us, we are here to help. Call us today or drop us a line via email. Here is our contact information:
Call us Toll Free: 1-877-860-8025
About the Author:
Sandy Johnson is the founder and managing partner at North Star Fleet Solutions in Calgary. The company provides vehicle tax and license compliance services for trucking operations ranging from single vehicles to large fleets. She can be reached at 877-860-8025 or northstarfleet.com.