Taxes and FuelCloud: The Power of Automation in Action
Tristan Kruth
Mar 05, 2020
Effectively filing refunds for off-road fuel use can save organizations thousands of dollars. FuelCloud explains what state and federal fuel taxes are, and how its technology can make filing refunds easier.

Fuel tax refunds can significantly reduce overall fuel costs, but lots of businesses leave thousands of dollars on the table each year by not accurately filing for fuel tax refunds. Accurately tracking and reporting on tax refundable fuel takes a lot of paperwork and effort that seems like it could be better spent elsewhere, but there can be a big payoff if it’s done correctly.

With April 15 just around the corner, it’s a good time to talk about what fuel taxes are, how impactful off-road fuel tax refunds can be to your fuel prices , and how FuelCloud can help with the most arduous parts of the tax refund process.

The Short Version of Fuel Taxes

Let’s start with the basics: gasoline and diesel are taxed at both the federal and state level. Federal gasoline and diesel taxes (18.4 cents per gallon and 24.4 cents per gallon, respectively) have remained unchanged since 1993, but state taxes on gasoline and diesel vary widely - from 14.66 cents per gallon in Alaska to 53 cents in California. Some states have variable gas taxes that change alongside the price of gas and diesel, further complicating the calculation of your tax burden. 

Whether your tax rates are high or low, the important detail is that these taxes are only on fuel used on roads. Certain off-road vehicles and equipment are exempt from taxes, and refunds can be issued if you complete the required paperwork correctly.

At a high level, organizations who want to get a refund on their off-road fuel use need to keep an accurate, audit-proof record on on-road and off-road fuel use - a difficult challenge in and of itself. But each state also has specific requirements for the records that must be submitted to get a refund, as well as when and how frequently those refund requests must be filed. 

What FuelCloud can do

FuelCloud can’t do your taxes for you, nor can we advise you on how your taxes should be managed. What we can do, however, is track your fuel exceptionally well, and give you the power to use that fuel data for your tax purposes.

FuelCloud allows vehicles to be tagged as tax exempt in the FuelCloud dashboard, and subsequently tracks tax-exempt transactions for that vehicle automatically. With this data, FuelCloud can automatically complete federal tax refund forms and generate reports on tax-exempt fuel use for state refunds as well. By providing basic protections against the most common fuel tracking errors (for example, dyed diesel being put in an on-road vehicle), administrators can save hours of time previously spent manually completing tax forms and reconciling inventory discrepancies.

The true test of our tax features is how they stand up to audit. While the number of audits our customers have faced is few, we do have some anecdotal evidence that we’re doing things right: a customer of ours received the first perfect score on a fuel tax audit in the history of that customer’s state thanks to FuelCloud’s transaction tracking and allocation tools.

‘Easy’ isn’t often a word associated with taxes, but FuelCloud’s tools are designed to simplify the hardest parts of fuel tax refunds- transaction tracking and completing the paperwork. The guiding principle behind our software-first approach to fuel management is that ‘complexity’ shouldn’t be a reason why an organization does or does not make a decision. However you choose to handle your fuel taxes, you can trust FuelCloud to make that process less of a burden.

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