If you use propane to power forklifts in your operations, or other alternative fuels in your fleet, there may be an opportunity to file a Federal excise tax claim for a credit or refund related to the fuel used during 2017.
Throughout the year, Sokolis Group must update its records for all of the changes made to fuel taxes. It’s a tedious task to sift through the information scattered across the internet for each state. Even though there are web sites that consolidate fuel tax rates in one place, identifying potential exemptions takes more research than just glancing at summarized data. That usually means a visit to a state’s site and digging into their tax regulations.
Traditionally, state governments have funded road construction through taxes on fuel. As vehicles become more efficient, though, the income from fuel tax is affected, with long-term concerns that it might eventually become insufficient. An increase in electric cars – and the introduction of electric trucks (Tesla recently unveiled an electric semi-truck) is starting to cause revenues to drop. With more than 90 percent of federal Highway Trust Fund receipts being collected at the pump, this is a very real concern.
As a CPA, I’ve been dealing with taxes for my entire career. To be honest, it’s a part of my job that I really don’t enjoy. There are so many different tax rates and so many inconsistencies when comparing different states, or even counties within the same state. Plus, taxes are always changing! For me, it’s a never-ending battle to stay on top of taxes, especially fuel taxes which are an important component of fleet fuel management.
I’m a diesel fuel price geek, what can I say. I make my living understanding this stuff. As I was preparing to write my annual projections on diesel fuel prices, I started to wonder, is there any trend that no one is talking about? The Energy Information Administration (EIA) projected 2014 to be $3.77 a gallon, but that was only a month after they predicted diesel fuel would be $3.73 a gallon. My guess, they will probably be wrong on both.
Have you noticed the tax changes in your state? Both diesel and gasoline taxes were changed (mostly increased) in ten states effective July 1, 2013. The obvious reason for this seems to be the growing concern for the deteriorating roads and bridges across the country and the lack of additional funding coming from the federal government. I can’t speak for other states, but living in Pennsylvania we have the largest percentage of structurally deficient bridges. Our roads aren’t that much better with all the snow and salt that gets thrown on them. States have now taken it upon themselves to increase taxes to pay for these costs.
While states struggle to keep up with increased demand on their highway infrastructure, people buying diesel fuel and gas are going to pay. In the latest news, the state of Virginia has passed a law that goes into effect July 1, 2013 that will raise diesel fuel taxes and gas taxes.