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With fuel rates at record highs, many states are taking steps to lower costs for carriers. But with details as varied as the states themselves, carriers need to pay close attention to the fine print when taking advantage of any of these programs.

Criteria vary by state

Several states have suspended fuel excise taxes and/or sales taxes, others offer relief from taxes only for certain fuels, and the dates of these programs are different in every state.

For example, in Georgia, motor carriers who are licensed with the International Fuel Tax Association (IFTA) and traveling in Georgia are exempt from motor fuel tax from March 18, 2022, through August 13, 2022. Carriers will be able to purchase qualifying motor fuel tax-free and travel non-taxable miles in the state during this suspension period. However, IFTA returns are still required to be filed for the quarters that include this tax-free period. In addition, all fuel purchases must be reported on IFTA returns to accurately reflect miles per gallon (MPG) for the suspension period. On the IFTA return, filers must report all miles traveled and fuel gallons purchased in Georgia for the suspension period as non-taxable miles and non-taxable gallons. In another example, carriers licensed with IFTA, traveling in Florida, and purchasing gasoline products will see a reduced tax rate during October. However, the reduced tax rate does not apply to diesel. In this case, there will be a split tax rate for the 4th quarter of 2022 for gasoline and gasohol: one rate for October and another rate for the rest of that quarter.

Here again, filers should report all total/taxable miles traveled and tax paid fuel gallons purchased in Florida for the tax holiday. It’s important for carriers to maintain all mileage and fuel records during these tax holidays to document any claims made when filing IFTA returns.

Reporting issues arising in some states

Some jurisdictions are having issues complying with these “tax holidays” because of internal system requirements that may, for example, require total gallons/liters to equal tax paid gallons/liters. If filers are unsure of how to report the activity under these programs, they must contact their IFTA jurisdiction for assistance using the systems.

For a current list of notices from states suspending fuel taxes or offering tax holidays, visit IFTA’s Important Notices page at https://www.iftach.org/important-notices.php.