Telematics, Software and Fuel Cards Streamline Fleets’ Fuel Tax Compliance

Anyone who has had to keep track of business travel for mileage reimbursement can understand the challenges faced by interstate commercial carriers.

When their commercial motor vehicles drive through more than one of the 48 states and 10 Canadian provinces that are members of the International Fuel Tax Agreement (IFTA), the fleet must submit a quarterly report that includes their miles driven, fuel purchased and tax paid in each of the jurisdictions. This is done to ensure that each jurisdiction gets its fair share of the fuel taxes paid, based on the distance the vehicle traveled within that jurisdiction.

As one might imagine, this has been quite a chore for the interstate commercial carriers. Traditionally, they have kept track of the fuel purchased by collecting fuel fill-up receipts and tracked the miles driven by writing them in paper logs. Fleet managers then consolidated this information into a summary on paper or in a spreadsheet for the quarterly filing.

“Paper record keeping requires a careful organization with record keeping for years in the event of an audit,” Scott Sutarik, vice president of commercial vehicle solutions at Geotab, told PYMNTS in an email interview. “Possible loss of paper records is not uncommon, particularly with fuel fill-up receipts. It is a significant and continual undertaking to manage records for fleets via paper records.”

Digitizing the Compliance Process 

Today, digitization can provide an alternative. With fuel cards, software and telematics, fleets can automate much of the compliance process.

For example, Geotab offers the Geotab GO telematics device that records both GPS and odometer data at frequent intervals. The company also offers its MyGeotab fleet management software that provides access to IFTA solutions and tools. With data from the telematics device and the fleet’s fuel cards, this generates the needed reports. 

“The IFTA report aggregates distance by jurisdiction per vehicle and also allows for integration with fuel fill-ups,” Sutarik said. “The report has specialized logic to process the vast amount of data generated by devices over the course of each day.” 

He added that with telematics capturing the daily trips of each vehicle and the time spent in each jurisdiction, drivers are freed from this task and the data is more accurate.

With the platform integrating the data from the telematics and fuel cards, the generation of an IFTA is automated and can be sent to a third party to produce the completed tax forms. Plus, digitization eliminates the issues that arise when relying on paper records — missing paperwork, entry errors, late filings, overpayments or audits. 

Integrating a Comprehensive Platform 

Accurate reporting is important. Fleets are required to obtain an IFTA license for qualified motor vehicles that travel in more than one IFTA member jurisdiction. To verify compliance and ensure the correct tax is being paid, each member jurisdiction in IFTA is required to audit 3% of its licenses annually.

In addition to IFTA, the MyGeotab platform helps with other compliance required of fleets, such as the electronic logging device (ELD) mandate, which requires many commercial vehicles to use a device that records driving time and other data, and Hours of Service (HOS), which regulates the number of hours truck drivers can drive and work. 

“IFTA is considered to be an important part of fleet compliance, in addition to ELD mandate and [HOS] management, all of which are considered to be mandatory processes across many fleets,” Sutarik said. “By integrating a comprehensive telematics platform, users are able to streamline their compliance management processes including HOS, ELD and IFTA, to ensure they are providing accurate information without compromising time on the road.”