My spelling is pretty good, but grammar has always been weak. Seems as though every time I moved, grammar was coming up at my old school and already passed at the new one. The joys of public school. Anyways, I'm under a tight deadline. Editor moved up my first article from January to..... monday! What a leap!

I've chosen to talk about IFTA and how to buy fuel. It is for the company quarterly newsletter. I would really appreciate any tips, comments, grammar error fixes, etc...

Here it is:

Welcome to the inaugural column brought to you by Allan Simonson, unit 400 of Payne Transportation. The purpose of this column is to expand profit and share ideas. In this edition I'm going to attempt to explain how fuel tax works, and why you should only be concerned about the base price of fuel.

How does fuel tax work?

Every time you purchase fuel, fuel tax will be paid. This money is banked on your behalf in your IFTA account. At the end of the quarter/month, your company will calculate how many gallons burnt in each jurisdiction, and will calculate how much is owed to each out of the IFTA account. If the total amount you owe is greater than how much you've paid throughout the quarter, additional IFTA tax will be owed. If the opposite is true a refund will be issued. Whether you get a bill or a refund doesn't actually matter, the total bill is the same.

That's why how much fuel tax you pay at the pump doesn't matter. Buying fuel at truck stop A or truck stop B in different states doesn't change your total fuel tax bill, only shifts it from paying now or paying later.

How does this affect fuel purchasing?

This has a unique effect on fuel purchases. Think of your fuel purchases as two distinct units, one you're paying for the fuel, the other is simply being banked away in your IFTA account. This means you want to pay the least for the first part of the fuel price(the base price), since the second price doesn't matter. That is why we need to deduct the fuel tax when comparing prices.

If you've passed through Illinois to get fuel in Indiana, you've made a very common mistake in our industry. Fuel is far cheaper in Illinois even though the pump price suggests otherwise.

Payne Transportation supplies maps with fuel tax rates on them, updated quarterly. Use these maps to deduct the fuel tax from the pump price as follows:

Pump price - State fuel tax rate = Base price

In the next issue, I will address cross border fuel price calculations, how to lower your total fuel tax bill(there are only two ways, increased fuel mileage or changing your routing), among other things. Any tips/comments/flames/ideas drop me a line at (email address removed).

 

Allan, I think you have explained a very confusing concept very well. Many o/o have no idea how this is done. Except to explain how fuel tax is calculated, usually based on miles travelled in each province or state I think you've done a very good job. Also, it seems that your grammar is pretty good. You have been direct & to the point. That's all that's necessary.

Just my 2 cents worth!

 

Thanks for the tip!

BTW this guy:

Mullen :: Corporate Responsibility -

and this guy:

Payne Transportation -"No Payne No Gain"

Will be "approving" my article.

 

does the column have a name? After introducing yourself, tell us something about yourself. don't brag, just something brief. why were you chosen, what are your unique qualifications?


"the purpose of this column is to expand profit and share ideas" rework this. how about .....the purpose of this column is to share our experience and knowledge to expand profits?

...your company will calculate how many gallons burnt? shouldn't this be bought? if so, purchased is a better word. if not, then do you mean burned?

remove the line there are only two ways, increased fuel mileage or changing your routing it gives away the jist of the next article and contributes to a run on sentence.

HTH

 

I wasn't sure how to put that across, and kept changing the damn sentence.

Used is the correct term, not bought.

I wasn't sure if I should or not.

 

also it might be a good idea to give real life examples of fuel prices in different states that illustrate your principle. are there any others you can show in addition to indiana and illinois?

 

i do like it so far, just a couple minor tweaks here and there. :thumbsup:

 

There is Florida and Georgia. I used Indiana and Illinois because it is both an extreme example, and an example that our drivers use regularly. A couple sentences there should be reworked though, sounds condescending.

 

Well I polished the turd up and this is what I ended up with(although it's probably too long):

Welcome to the inaugaral column, written by Allan Simonson, Unit 400 of Payne Transportation. Before I get started, let me tell you about myself. I have worked for Payne since January 2009 and have 6 years of experience as an owner/operator. Although I may not be an expert on the industry, I do take a scientific approach to many aspects of the industry. To say 'I'm a numbers guy' is an understatement.

The overall purpose of this column is to share our collective knowledge, hopefully resulting in increased profit. In this edition I am going to explain how the International Fuel Tax Agreement (IFTA) works, and how to use the base fuel price to your advantage.

How does IFTA work?

Every time you purchase diesel, fuel tax is paid. This money is banked into an IFTA account that is assigned to your unit. At the end of the quarter/month, your company will determine the total amount of gallons consumed in each jurisdiction. They will then calculate the amount owed (gallons consumed X fuel tax rate) from the IFTA account. If the amount owed is greater than the amount you have paid throughout the quarter, additional IFTA tax will be charged by the carrier; if the amount owed is less, a refund will be issued. It does not matter if you are billed or refunded because the total fuel tax paid will be the same regardless of where the fuel is purchased. Review your monthly fuel tax report to better understand the figures and calculations.

How does IFTA affect fuel purchasing?

The cost of fuel at the pump is broken into two separate units: the base price and the fuel tax. The base price is the cost of the fuel without tax. Ideally, you want to pay the least for the base price, because the fuel tax does not matter in the long run. When comparing prices, you should deduct the fuel tax from the pump price(i.e.; pump price - state fuel tax rate = base price). Payne Transportation supplies maps with fuel tax rates (updated quarterly).

A common mistake is to buy fuel in Indiana after passing through Illinois. Fuel is far cheaper in Illinois even though the pump price suggests otherwise. Another good example is Florida and Georgia.

In the next issue, I will give real examples of fuel cost savings using this fuel purchasing method, I'll show how to lower your total fuel tax bill(there are two ways) and how to compare cross border fuel prices. If you have any column ideas, comments, or questions, contact me at (email removed).

 

I like the second version better. Especially the introduction, it seems to qualify you as someone worth listening to. I think it reads very well. The last paragraph leaves me wanting more, anticipating that next issue.