• As part of IFTA’s Strategic Plan, one of the organizations objectives is to “make the exemption database complete and useful”. • The board felt that this objective was needed to address a concern that the database was not being updated and used to it’s potential. Many jurisdictions had no data entered or entered no exemptions.
• IFTA Inc. has taken steps to meet this objective through recent changes like the web site “control center” and through increased monitoring to ensuring jurisdictions are updating the exemption database as well as fulfilling the annual reporting requirement.
• Part of the action plan calls for the board (small ad hoc committee) to review the current wording and structure of the database with a view to making it more useful. • The current structure has served the organization for a number of years and the board felt a review was needed. It’s time to re- visit the experiment to see if we can improve it.
Issues to Examine • Who uses the information? For what purpose? • What information is currently being reported? • How can the database be changed to make it more useful? • What guidelines should be provided to make the information more focused?
Purpose The primary purpose of the exemption information should be to assist licensees in completing the tax return and for auditors to verify the legitimacy of any claims for non-taxable distance.
• Currently we have "exemptions" in the categories of VEHICLES, DISTANCE, FUEL and OTHER. Some exemptions seem to apply to all the categories. • All "exemptions" are based on the reduction of total distance to establish taxable distance.
General Guideline For Reporting “Exemptions” • Report situations where your jurisdiction will allow a reduction of total distance due to fuel being consumed in Qualified Motor Vehicles (QMV) in a manner which is either not taxable or is specifically exempt through legislation or policy.
Reporting Should Include: • Distance traveled by QMV’s which are: – Operated by specific entities (Governments, school boards) – Used on specific roads/off road (MA turnpike) – Registered for specific uses (buses, dealer plated vehicles, special mobile equipment
Reporting Should Exclude: • Distance traveled by: – Vehicles which are excluded from the QMV definition (recreational vehicles, less than 26,000 lbs) – Non-motive fuel usage (i.e. PTO, idle time – perhaps a separate refund section should be adopted for this type of situations) – Fuel product types (i.e. natural gas – this is handled by the tax matrix) – Fuel usage that is unrelated to consumption in a QMV
Questionable: • Distance traveled by QMV’s which are: – Owned, registered or operated by Governments (Federal, State, Local, School boards) – Operating on a Fuel Trip permit – Owned/Operated by Native Americans/First Nations individuals or bands. – Unregistered/non-registerable vehicles and equipment (base jurisdiction definition??)
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