Diesel price versus cost, or whose $20 is that?

[nightcreacher]

RE: Diesel price versus cost, or whose $20 is that

Ok guys what you are writing is all true,but as you might have noticed,almost all the states fuel prices are now within just a couple cents of each other
Myself,I got rid of the heavy foot,and buy fuel in every state,I pretend I only hold 140 gallons of fuel,only useing one of my fuel tanks
In all the years I've been an owner opp,now is the only time my quarterly fuel tax has been very small
and as stated before,even though the price at the pump might be low,doesnt mean your getting a deal
Here's to all those fast trucks running truck stop to truck stop,glad im not paying their fuel bills.
With my mpg and fuel surcharge,i dont buy fuel anyway,just pay taxes on it
nightcreacher
ooida263839
fed ex cc since 1984
E6613
steve gilbert

 

[LDB]

RE: Diesel price versus cost, or whose $20 is that

Just to make the mud a little clearer, the picture has changed as of today. Today's prices are $2.999 in Ocala and $2.839 in Tipton. That makes the after tax cost slightly less in Georgia. For today the optimum plan would be to purchase at least enough gallons in Fl. to cover the gallons burned in Fl. and to buy at least as many in Ga. as will be burned there. Where to buy the remainder of what the tanks will hold depends on where you go after exiting Ga. You would have to compare where you are going to Fl. to determine which is better. The main point is that this changes on a daily basis and you have to do your research to get the lowest overall cost.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.

 

[ATeam]

RE: Diesel price versus cost, or whose $20 is that

Nice piece, Leo. Well researched and well written. Good job. I hope readers appreciate the effort and attention to detail that is required to produce a piece like this. Thank you for your contribution.

 

[Night_Runner36]

RE: Diesel price versus cost, or whose $20 is that

Claps My hands to LDB... that was very helpful to Me for one has I have never really understood the fuel tax thing when dispatch says I get this amount to do the haul then I normaly just put it in where ever I maybe parked at the time before I head out to do the pick up ..I will pay more att to it now and do the math before I put the fuel in now ...again thanks LDB the light bulb clicked on ...lol

 

[LDB]

RE: Diesel price versus cost, or whose $20 is that

Thanks to everyone for the compliments on the post. This is a topic that can be worth hundreds of dollars per year of tax free money but most people don't understand it. My goal is to make it understandable so people can keep their money in their own pocket.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[tmbm]

RE: Diesel price versus cost, or whose $20 is that

Leo,
Thanks for the info. Since I drive for an O/O I hadn't thought about the tax issue when purchasing fuel, simply the pump price. I will pay more attention now. Also I do want to get my own truck someday so I have a question. When it comes to fuel taxes, is a "D" unit based on the trucks GVWR, or what you can haul. Say I have a truck that GVWR of 32000, but due to size of box the company considers me a "C" unit, will I have to pay fuel taxes?

 

[blacktiger]

RE: Diesel price versus cost, or whose $20 is that

Very useful article. Site is great with this kind of information.


George

 

[LDB]

RE: Diesel price versus cost, or whose $20 is that

Fuel taxes come into play for any truck 26,001 pounds or greater gvw even if the payload capacity were only a dozen pounds.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[Broompilot]

RE: Diesel price versus cost, or whose $20 is that

Still learning, after reading these posts I just have one question not meaning to be a smart XEET here but are we not in Expediting? How much time does one have to spend in lines at any discounted fuel stop. Sometimes I see the lines three deep, does one have enough time to worry about putting 35 gallons in GA?

 

[kempers_gramp]

RE: Diesel price versus cost, or whose $20 is that

Great Post but:
Here's a question that may be moot. With the extra savings that you put in your pocket at the end of the year is it possible that you may put yourself into a higher tax bracket and in the end, end up paying more in taxes? If so then wouldn't all of the time you spent trying to figure out where to fuel be just a waste of time? A waste of time is a waste of money, because time is money. I understand what you are saying and am in question as to whether or not it really is worth it in the end. So when it comes right down to it shouldn't we try to buy as much fuel in each state as we will use there, not necessarily on a per trip basis.
I guess that it would be determined on a per person or truck basis varying yearly.
I do appreciate the info in this post and, I may be way off base with this question.

When you develop a calculator to figure this all out for me let me know, I'll be the first in line to buy one~!!!!!
Thanks,

 

[LDB]

RE: Diesel price versus cost, or whose $20 is that

You will owe taxes on the money because less expense equals more income. If you are in the 15% bracket you owe $3 out of each $20 you pocket. If you happen to be at a point where an extra $1000 from fuel tax savings pushes you one bracket higher I don't know what the net effect would be. I'd say then it's time to figure out another expense not listed or charitable contribution made or put a little more in an IRA or whatever to drop back the hundred or two that pushed you over. It is definitely more work but worth it in the long run I think.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[gandrew]

RE: Diesel price versus cost, or whose $20 is that

A great reminder, thanks. We are in Portland Oregon, where today diesel is $2.71. There is no tax advantage to buying fuel here even if it is cheaper. PLUS we get charged 13 cents a mile tax to drive on their roads!! Figure 9 mpg and add that to the fuel and it's way expensive, plus we would be driving in surrounding states with full tanks so we will owe more for that driving too. Oregon is very not truck friendly.

 

[Falligator]

RE: Diesel price versus cost, or whose $20 is that

OIL COMPANIES WILL GET MONEY AND THE GOVERNMENT WILL GET THEIRS TOO! I once heard that big oil revenues equal about 1,300$ per SECOND! too bad i didn't win that 300 million dollar powerball!


I once seen a bumper sticker that read,
"Don't steal the government hates competition." lol

 

[pjjjjj]

Re: Diesel price versus cost, or whose $20 is that

I should have mentioned that only applies to D and E units. For B and C units the only key is checking the wholesale price at T/A to see if it's a good place to stop.

Thanks for the great info! Wow, it DOES make one's head spin!
Of course, I have some questions..
How often, (if ever?), do these tax rates change? Are they something needing to be checked on a daily basis, monthly, yearly?
When you say it ONLY applies to D and E units, does that mean C units *can't* do this reporting (if it were to their advantage to do so), or that they don't *have* to do this reporting?
The carrier husb is with, asks for copies of all gas receipts, and he was told they would do the fuel tax reporting on his behalf, and that he would be getting refunds quarterly; i)we have not seen any evidence of any reporting as of yet (he has been with them since beginning of Oct07); ii)he has a C-Unit, so why do they want them in the first place?
Are there any other rules for when you Americans come into Canada?
Thanks for posting such an informative post.. I'm assuming the information is still relevant even if the numbers may have changed since you posted it!

 

[DreamTeam44]

In Kentucky, Oregon, and a couple other states I think Idaho they wait until the end of the Month/Quarter because they charge you a mileage tax rather than a fuel tax.

On our settlements all the FICA taxes are figured, when we first noticed the mileage tax back then we called to inquire.

I don't have a settlement in front of me now or I could be more precise in my facts.

Sorry, this 'ol mind and this 'ol body ain't what it used to be!

 

[LDB]

Re: Diesel price versus cost, or whose $20 is that

I don't know about Canada. Here only vehicles 26,001 and over have to report. C units generally fall below that so they don't report. I can't find my link right now but the current rates may be available on dieselboss.com or Kevin Rutherford's site but I don't remember the name of it.

 

[greg334]

On our settlements all the FICA taxes are figured, when we first noticed the mileage tax back then we called to inquire.

You're an employee and paying fuel taxes?

 

[SHARP327]

Thanks Leo!

You've done a real good job explaining how the fuel taxes work...But...I have a problem in worring about who does what and why.

My reasoning is this...my thought is fuel and fuel taxes are a cost of doing business which I think are a 100% write off when doing my income taxes and if I receive a credit on my settlement it shows up in the income column which I'll end up paying taxes on again, even when I receive my rebate from Pilot it shows up as income as well and that's why I avoid using Pilot.

I'm not saying that you're wrong...I'm just saying that I've got alot of other issues to worry about and come the end of the year if I haven't used the money in fuel, taxes, maint and repairs and what ever else comes along then I'll have to give it to Uncle Sam.

Having said this I'd also like to say that if I'm wrong about the taxes being a complete write off then I stand corrected and I'll consider worring about how to calculate the fuel tax thing.

Thanks Leo!

 

[jaminjim]

You're an employee and paying fuel taxes?

Where did you come up with him being an employee?

 

[LDB]

This is my understanding and as my better half often reminds me is subject to being better understood. We deduct the entire amount of fuel purchased so we are getting a deduction on the fuel tax portion of the purchase. The fuel tax portion of the purchase goes into an imaginary piggy bank. Each time we buy fuel, money goes into the pig. Each state we drive in reaches into the pig at the end of the quarter to take out a set amount per gallon burned in that state. Where we buy is the factor determining how much is in the pig. If there isn't sufficient money in the pig then they reach into our pocket for the rest. If there's more than they need then we have a little surplus in the pig for the next quarter. Income taxes don't affect the pig. It is the temporary repository of fuel tax funds awaiting distribution to the states. Back to my GA/FL example. The purchase of 100 gallons has a net impact of $16.47 on the balance in the pig. It costs $8 more at the pump to create that $16.47 in the pig so we're ahead $8.47.

Pilot vs others. I don't know what tax bracket you're in so I'm going to use 25% since it works well with coins. Say your choices are Pilot or X or Y and Pilot has the best price. You could save $2 on your fuel purchase if you used Pilot over X. You'll get a rebate of that $2 and out of those 8 quarters uncle Sam decides to grab 2 of them. You're still ahead by 12 bits (6 quarters for those who aren't familiar with bits). Yes, it's double dipping but it still makes a net gain in my pocket.

Oh, a final thought on the fuel tax thing. Last quarter they dipped into my pocket for $5.87 and they dipped into the pockets of the 3 other drivers I know about for $134, $151 and $188. I don't suggest folks are going to make money this way, just that they're going to keep more of what they've previously made. It's some nuisance but I figure it's worth about $500 a year to a solo, maybe more and probably could be close to $100 a month for teams.