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3 ways to reduce the complexity of fuel tax reporting & compliance

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The International Fuel Tax Agreement (IFTA) is an agreement among U.S. states and Canadian provinces to simplify accounting and payment of fuel taxes for truckers who frequently cross state lines. While it was meant to relieve trucking companies of some paperwork, it’s become a major cause of confusion. 

IFTA requires carriers to file a quarterly fuel tax report, listing miles traveled in all participating jurisdictions and gallons of fuel purchased there. They must include the vehicle mileage record, distance records, fuel records and tax-paid retail fuel purchase receipts, along with all relevant data such as gap miles and fuel receipts. It’s no easy task and errors can result in hefty fines. For this reason, most fleets spend an enormous amount of resources, both in time and personnel to comply with IFTA. Luckily, there are ways to lessen the burden. 

Ditch Manual Recordkeeping & Adopt an Automated Solution

The trucking industry has long relied on manual recordkeeping for compliance, from logging driver hours to IFTA compliance. While the impending ELD mandate is forcing fleets to automate their HOS recording, more are voluntarily adopting technology to automate fuel tax reporting. Not only does this eliminate manual data entry and unnecessary processes, it also offers carriers more consistency and efficiency when tracking and reporting fleet movement and provides more accurate trip records. This means a lower risk of audits and compliance violations, not to mention the time it saves fleets – time that can be given back to drivers to get from point A to point B, and to improve their satisfaction on the job.

Look for a Solution that Integrates with GPS Fleet Tracking Tools 

It’s not enough to just adopt a technology solution for IFTA compliance. Fleets should also look for a tool that integrates with their existing fleet tracking solution. With so many software programs to manage, allowing a single point of entry eliminates some administrative duties and provides a more seamless workflow between drivers and dispatchers. It also removes the need to manually register vehicles in separate systems – a major pain for large fleets. 

Educate Drivers on the Benefits of Technology

The IFTA quarterly fuel tax report can be a dreaded time of year for fleet managers, but it’s also an everyday burden for drivers. Regardless, most drivers have become accustomed to manual recordkeeping and will likely be resistant to change – no matter how much it will simplify their jobs. That’s why it’s important to get their buy in – and do so early on. When adopting an automated solution for fuel tax reporting, make sure you communicate the many benefits it will bring to drivers, from reducing the time they spend on paperwork, to lessoning the stress of losing a receipt that could result in a fine.

Click here to learn more about IFTA. 


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