slide1
Download
Skip this Video
Download Presentation
IFTA – Dual Fuel Vehicle Tax Reporting

Loading in 2 Seconds...

play fullscreen
1 / 35

IFTA – Dual Fuel Vehicle Tax Reporting - PowerPoint PPT Presentation


  • 154 Views
  • Uploaded on

IFTA – Dual Fuel Vehicle Tax Reporting. August 14, 2014 Pittsburgh, PA Presented by DUAL FUEL WORKING GROUP. Overview. A Quick Recap on Dual Fuel Vehicles Conversion Issue for LNG Diesel gallon equivalents Short-Track Ballot #05-2014 New Fuel Types for the Clearinghouse

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' IFTA – Dual Fuel Vehicle Tax Reporting' - dale-pittman


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

IFTA – Dual Fuel Vehicle Tax

Reporting

August 14, 2014

Pittsburgh, PA

Presented by

DUAL FUEL WORKING GROUP

overview
Overview
    • A Quick Recap on Dual Fuel Vehicles
  • Conversion Issue for LNG
    • Diesel gallon equivalents
    • Short-Track Ballot #05-2014
  • New Fuel Types for the Clearinghouse
    • For reporting between jurisdictions
dual fuel working group
Dual FuelWorking Group

IFTA:

Hugh Hughson (BC) Dawn Lietz (NV)

Paul Bernander (WI) Garry Hinkley (MI)

Tim Ford (CA) Chuck Ulm (MD)

Industry:

Robert Pitcher (ATA) Gary Bennion(Con-Way)

FTA:

Cindy Anders-Robb

IFTA, Inc. Advisors:

Lonette Turner Amanda Koeller

dual fuel vehicles 101
Dual Fuel Vehicles - 101
  • Dual fuel vehicles can use two fuels at the same time (i.e., diesel and natural gas)
  • Two types of natural gas are being used:
      • Compressed Natural Gas (CNG)
        • Stored as a gas in high-pressure tanks (e.g., 3,000 to 3,600 psi)
        • Often sold as a gaseous measure (e.g., ft3 or m3)
    • Liquefied Natural Gas (LNG):
      • Stored as a super-cooled liquid (e.g., -260°F or -170°C)
      • Almost always sold as a liquid measure (e.g., gallons or liters) or by weight
slide5

Dual Fuel Vehicles - 101

  • Expect:
    • At least 5% of long haul vehicles will be dual fuel within the next 5 years
    • LNG will be used more for since the energy content comparable to gasoline and diesel fuels
slide6

Dual Fuel Vehicles - 101

  • Ballot #03-2013:
    • 1 gallon of CNG equals 126.67 cubic feet, and weighs 5.66 pounds
    • 1 liter of CNG equals 1.0 cubic meters, and weighs 0.7316 kilograms
            • (Needed since jurisdictions conversion rates for CNG vary considerably)
cng conversion rates
CNG Conversion Rates

Source – FTA

conversion factors for lng
Conversion Factors for LNG
  • We told you LNG always sold as a liquid (we were right but there is still a problem)
  • In the United States two different methodologies exist to convert LNG to volume measures:
    • Straight weight - 1 gallon weighs 3.5 pounds
    • Energy equivalent weight - 1 DGE weighs 6.06 pounds
slide9

Conversion Factors for LNG

  • In Canada:
    • The Federal government determines the units of measure and is strongly opposed to energy equivalents:
        • The source of the raw product, the refining/manufacturing process, age of the finished product and season of use can all significantly affect the energy content of diesel and LNG
        • In addition, temperature and pressure greatly affect LNG energy content
        • The result, it is almost impossible to establish a fixed ratio to accurately compare these fuels
slide10

Conversion Factors for LNG

  • In the United States:
    • Retail stations want DGE so the public can compare LNG with diesel
    • National Conference on Weights and Measures is likely to adopt DGE
    • Understand 18 states have DGE legislation (with two more likely before year-end)
short track ballot 05 2014
Short TrackBallot #05-2014
  • As with last years CNG Ballot:
    • We need a consistent process for LNG reporting and disbursement of taxes between jurisdictions
    • There is no impact to sovereignty (a jurisdiction tax rates and units of measure are their responsibility (in the US)
    • Other standards exist to ensure consistent reporting and distribution of taxes between IFTA members (e.g., distances, volumes, and currency)
short track ballot 05 20141
Short TrackBallot #05-2014
  • Are recommending, for IFTA reporting and transmittal purposes, that LNG be reported in energy equivalent measures:
      • diesel gallon equivalent weighs 6.06 pounds; and
      • diesel liter equivalent weighs 0.7263 kilograms
  • As an example:
    • If this ballot does not pass; and
    • I post an LNG tax rate of $0.29 per “gallon” is it…..
short track ballot 05 20142
Short TrackBallot #05-2014

$0.29 / straight gallon (3.5 pounds)

?

?

$0.29 / Diesel Gallon Equivalent (6.06 pounds)

short track ballot 05 20143
Short TrackBallot #05-2014
  • At a high level:
    • Jurisdictions will send LNG tax rates to IFTA which convert:
      • $C/litre to $US/gallon (for US jurisdictions - but is it a straight gallon or DGE?)
      • $US/gallon to $C/litre (for Cdn jurisdictions - but is it based on a straight gallon or DGE?)
      • IFTA and jurisdictions post LNG tax rates for carriers (straight gallon or DGE?)
    • Carriers submit tax returns, base jurisdiction process and then send to Clearinghouse (straight gallon or DGE?)
short track ballot 05 20144
Short TrackBallot #05-2014
  • Base jurisdictions get Clearinghouse data from other jurisdictions and try to compare with Funds Netting (but will find that difficult because they don’t know if a straight gallon or DGE are being used?)
short track ballot 05 20145
Short TrackBallot #05-2014
  • Proposing:

P1320 - FUELS NOT MEASURED IN LITERS OR GALLONS

For IFTA reporting and transmittal purposes, the use of liquefied natural gas shall be reported in energy equivalent measures (i.e., a diesel gallon equivalent in U.S. jurisdictions weighs 6.06 pounds, and a diesel liter equivalent in Canadian jurisdictions weighs 0.7263 kilograms).

short track ballot 05 20146
Short TrackBallot #05-2014
  • Proposing:
    • An effective date of July 2015 but comfortable moving out to July 2016, if additional time is needed to make system changes
  • Key issue is that we:
    • Think about the impact of dual fuels; and
    • Get a consistent unit of measure for LNG reporting and disbursement of taxes between jurisdictions
slide19

Dual Fuel Reporting for IFTA

  • Last year we proposed a methodology for accurately reporting dual fuel activity using the existing IFTA return concept
  • This year I’d like to provide some further thoughts on how carriers, jurisdictions and IFTA could more easily communicate dual fuel activity
slide20

Dual Fuel Reporting for IFTA

  • As background:
    • Dual fuel vehicles must be treated and reported separately (e.g., pure diesel fuel fleet, the Diesel /LNG fleet, and the pure LNG fleet)
    • In addition, each dual fuel fleet must be treated as if two vehicles, separately reporting the:
      • Distances travelled (after pro-rating to void double counting distance travelled); and
      • Fuels purchased (e.g., pure diesel fleet vs. the diesel used in the dual diesel/LNG fleet)
slide21

Duel Fuel Reporting for IFTA

  • This reporting has the potential to create significant problems/complexities for:
    • Carriers reporting to base jurisdictions
    • Base jurisdictions:
      • Processing carrier tax returns;
      • Transmitting data via the Clearinghouse (and non-Clearinghouse jurisdictions), and
      • Desk/field audit activities
  • Think simplest solution is to create several new fuel types to keep dual fleet activity separate
slide22

Duel Fuel

Reporting for IFTA

  • Recommending four new fuel types so everyone can better understand/see dual fuel activity
  • End result is 3 for Diesel, 2 for LNG, and 2 for CNG as outlined below:
      • D - for pure diesel vehicles (existing)
      • LNG - for pure LNG vehicles (existing)
      • CNG - for pure CNG vehicles (existing)
      • DDL and DLNG - for diesel/LNG vehicles (two new)
      • DDC and DCNG - for diesel/CNG vehicles (two new)
slide23

Duel Fuel

Reporting for IFTA

slide24

Duel Fuel

Reporting for IFTA

  • Clearinghouse Advisory Committee:
    • Is aware of the additional fuel types concept;
    • Clearinghouse can accept the additional fuel types; but
    • Based on recent CAC survey 14 jurisdictions have system limitations (i.e., no more than two characters for fuel types)
  • I’m not sure two characters are sufficient but I’d like to leave that for CAC
general thoughts
General Thoughts
  • From a tax reporting/transmittal process dual fuel technology is:
    • A significant change in how we operate and will require system changes; and
    • Also places a significant burden on carriers and auditors
    • Assuming everyone is in agreement it will take time for jurisdictions to make system changes to accept/correctly process the incoming dual fuel returns
    • Future Program Compliance Reviews should “note” but not “cite”
general thoughts1
General Thoughts
  • Lastly:
    • Natural gas use is growing; and
    • Jurisdictions that currently exempt or tax natural gas at lower rates will likely see a reduction in overall fuel tax revenues as consumers convert to natural gas (e.g., private and commercial vehicles including marine applications etc.)
slide29

FYI - Following slides are from last year’s presentation for reference purposes only/in case questions come up.

recommended reporting process
Recommended Reporting Process
  • At a high level:
    • Dual fuel vehicles must be treated and reported separately (e.g., gasoline fleet, diesel fuel fleet, LNG fleet, dual fuel fleet)
    • Duel fuel vehicles must be treated and reported as two vehicles:
      • Separately reporting the distances travelled and fuel purchased
      • Pro-rating the distances to avoid double counting
recommended reporting process1
Recommended Reporting Process
  • Dual vehicle distances are pro-rated based on their fuel purchases:

dD Distance = Total Distance Travelled * Diesel purchase

Total (Diesel + LNG) purchases

dL Distance = Total Distance Travelled * LNG purchases

Total (Diesel + LNG) purchases

recommended reporting process3
Recommended Reporting Process
  • Pro-rating more complicated if a carrier has exempt distances
  • Developed and tested worksheet which can be used to accurately prorate the “Total Distance” and “Taxable Distance” between fuel types.
general thoughts2
General Thoughts
  • Worst Case - US carrier with a dual fuel vehicle in Canada
    • Buys:
      • Diesel in Canadian currency and litres; and
      • LNG in Canadian currency and kilograms
    • Separately track all fuel purchases (e.g., D, DDL, DLNG, DDC, and DCNG):
    • Convert to US currency and converts:
      • Diesel liters to gallons
      • LNG kilograms toa straight gallon or DGE…?
    • Combines with all US activity
    • Then pro-rates distances travelled by dual fuel vehicle to avoid double counting
    • Then completes tax separate tax returns/schedules for each fuel type:
      • DDL - diesel portion of the dual fuel vehicle; and
      • DLNG - LNG portion of the dual fuel vehicle
ad