Most businesses will hire a CPA or firm to help with tax planning and offer suggestions on ways to minimize what they owe Uncle Sam at the end of the year.

But one tax that’s often overlooked is hidden in fuel consumed by off-road vehicles and assets.

Even when a business is aware of it, a surprising number don’t bother to file a claim due to the work involved with preparing a manual return. That can be a costly mistake, and luckily it has an easy fix.

“At the end of the year, I’m going to run a report that shows that 40 percent of the miles our company drove were on non-maintained roadways. I don’t have to pay fuel tax for that, and we buy $3 million/year in fuel. We get a huge tax bang for that – enough I think to pay for the [Telogis solution] for the entire year.” Sterlin Smith, Pason Corp.

The fuel tax savings are particularly valuable to industries such as construction or oil and gas that spend a lot of time on job sites or driving on private and leased roads.

To understand what fuel tax recovery could be worth to your mobile business, take a look at this hypothetical example.

Fuel tax recovery – An example

Pennsylvania-based Skyscraper Construction, (where the state fuel tax rate is currently 50.5 cents per gallon of diesel; find the rates for your state), runs a lot of generators and cranes on worksites. They run cement mixing trucks that are regularly idling on site as well as pickup trucks driving on private roads at a nearby limestone quarry.

The table below shows how they calculate their fuel tax claim (where the tax rate is shown as zero this indicates the activity is not eligible for claiming). While some of the activities shown below may overlap, fuel consumed can only be assigned to a single activity. This table only shows diesel used, as gasoline rates are different.

Activity Gallons Federal Tax State Tax Tax Credit
Off-highway business uses (other than in a highway vehicle registered or required to be registered for highway use) 5500 24.4 64.2 $4,873.00
Refrigerated trucks and trailers (must be a separate motor) 0 24.4 64.2 $0.00
Auxiliary power units (APUs) 350 24.4 64.2 $310.10
Fuel used for cleaning 200 24.4 64.2 $177.20
Off-road equipment, such as in the construction and oilfield service industries 12500 24.4 64.2 $11,075.00
Diesel particulate filter (DPF) regeneration 25 24.4 0 $6.10
Certain school bus services 0 24.4 0 $0.00
Qualified local buses 0 24.4 0 $0.00
Heating equipment as heating oil 120 24.4 0 $29.28
Motorboats 0 24.4 0 $0.00
Highway vehicles owned by the United States and used off-highway 0 24.4 0 $0.00
Vehicles exclusively used by a state, political subdivision of a state, or the District of Columbia 0 24.4 0 $0.00
Vehicles operating off of public highways, such as on private streets and parking lots 13500 0 64.2 $8,667.00
Power take-off equipment, such as cement mixers 18700 0 64.2 $12,005.40
Vehicles while idling 4300 0 64.2 $2,760.60
Fuel lost (stolen, destroyed etc) 250 0 64.2 $160.50
Federal, state, and local government agencies and their contractors 400 0 64.2 $256.80
Emergency vehicles 0 0 64.2 $0.00
Total Tax Credit $40,320.98

Online tax calculator: Check what your fleet could be saving on federal and state fuel taxes with our online fuel tax calculator.

However, the work in manually recording and reporting where fuel is used is just not cost-efficient, meaning thousands of dollars worth of fuel tax rebates are lost every year. But there’s a way to make sure that money ends up in your pocket – not in Uncle Sam’s.

Telogis connected commercial vehicle technologies and reporting recovers thousands in fuel tax credits

Telogis is helping fleets to recover fuel tax credits using automated reporting systems as well as third-party plugins.

Telogis software along with hardware fitted to both vehicles and equipment can be used to automatically collect information such as:

  • Engine-on hours
  • Idle time
  • Miles driven, including by road type* (e.g. private or leased roads)
  • Average MPG (to calculate gallons consumed) using the Telogis Fuel Module
  • Feed integration for use in 3rd-party reporting tools (e.g. JJ Keller, NECS)**

*Road type available with Telogis Fleet Professional
**Assistance from Telogis Professional Services may be required

Telogis Fleet applications can also report on miles driven by state, which is used by fleets who are required to submit IFTA reports.

Using these reports, fleets can prepare both Federal Tax Paid on Fuels (Form 4136) and State Fuel Tax claims without the administration nightmare a manual return would involve.

With fuel tax claims largely automated, mobile enterprises can really start to benefit from the refunds they’re due. In fact, as Pason Corp discovered, it can often cover the cost of the entire fleet management solution, a system that delivers significant benefits for mobile workforces in the areas of safety, fuel efficiency and customer service.

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