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Fuel Tax Bonds

As you know (or at least I HOPE you know), we recently have made a huge push in our Fuel Tax Bond program.  We have worked out an incredibly good deal for fuel sellers and mixers of fuel to get a good bond.  We are so excited about this that we have a whole division dedicated simply to these bonds.

Enough about us, what about you?  Well, we have received a lot of questions about the Fuel Tax program (from our non-transportation clients, of course).

fuel tax bonding

What is IFTA?

The International Fuel Tax Agreement, or IFTA for short, is a treaty between the United States and Canada, which affects all Canadian provinces and the 48 continental United States.  IFTA produces a matrix that is supposed to “clarify” how fuel taxes are calculated and paid.  Of course, there are so many exceptions that this “clarification” can be terribly difficult in real life.

Here’s an example.  In 2015, biodiesel in Georgia had some exceptions passed, which are:

1) Jurisdiction provides either a refund or an exemption, impose a tax rate different than diesel, or offer an incentive (i.e. producers’ or income tax credit):
2) Jurisdiction offers a refund for tax paid on biodiesel for IFTA carriers:
3) Jurisdiction offers a biodiesel tax exemption for IFTA carriers:
4) Jurisdiction imposes a tax on biodiesel at a rate different than the tax imposed on diesel:
5) Instructions for the IFTA licensees based in your jurisdiction to report biodiesel use on the IFTA return. :
6) Biodiesel incentive such as a producer’s credit or an income tax credit:
7) Website that includes information regarding biodiesel:

See http://www.iftach.org/

So, this is what can create a lot of headaches.  Because this gets so tricky, states require that a bond is posted so ensure that taxes are paid.

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