IFTA and Drive-Away

Do you ever wonder where the millions of dollars come from to pay for all the road construction? Widening of your city streets, new interchanges on your highways, and fixing the older bridges on your county and state roads?

Every gallon of gas or diesel you purchase for your personal cars and trucks has a per gallon tax attached to the price at the pump. Your purchases are mostly local with a few from out of state trips or family vacations. The tax revenue from your gas or diesel goes to the state you reside in. The purchases out of state are revenue for that state.

According to Google, the Oklahoma City Metro area has a population of 1,322,429. For this example I’ll use 1 million cars with 20 gallon gas tanks. Generally, local vehicles fill up once a week. If the tax is $.02 per gallon the tax revenue for one car would be $.40. Doesn’t seem like much. If all 1 million cars purchased 20 gallons of gas in one day that tax revenue would amount to $400,000.

Big trucks, generally, have two fuel tanks (one on each side of the truck) with fuel capacities of 100, 120, and 150 gallons per tank. To fully fill up it would take 200 to 300 gallons of diesel.

If 8,000 trucks, with 100 gallon tanks (200 total) stopped at the truck stops in the Oklahoma City Metro area in one day the tax revenue would amount to $32,000. For that day.

The problem with big trucks and state tax revenue from fuel purchase is, for the most part, out of state trucks passing through your fair city.

This is where the IFTA, or Interstate Fuel Tax Authority, comes in. Each state, outside Oklahoma in the above example, one truck travels through those states get a portion of the fuel taxes paid in Oklahoma.

For Drive-Away, as well as all other trucking companies, the driver of the truck has to fill out an IRP form

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The driver is required to have the beginning mileage in a state and the ending mileage when they cross over into the next state. This report shows the total miles traveled through each state.

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Fuel purchases are noted on the form as well. The gallons purchased, the state, and the total purchase price.

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All trucking companies, whether they have one truck or thousands of trucks, have to keep track of the fuel purchases. A quarterly tax report is submitted, along with the tax funds, to a government agency which distributes the tax dollars collected to the appropriate states.

This is a simplified example of the IFTA Regulations. If you would like to learn more about it you can start here.

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About Message In A Fold

I am an over the road truck driver in Drive-Away Transport part of the year, and the sole bookkeeper of this operation the other part of the year. I do a lot of whining until I can get in my craft room and play with paper and glue. View all posts by Message In A Fold

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