To me, Memphis conjures up images of blues bars and Elvis. But the city’s role as a freight hub makes it a big draw for some of the brightest minds in transportation.
Not long ago, I was in town for a conference and asked a soon-to-be college grad what excited him most about his upcoming supply chain management career. “Technology,” he said without hesitation. “Data is driving this business.”
“So what do you think about ELDs?” I asked.
He had no idea what I was talking about. I had to explain the rule and the gargantuan impact electronic logging devices will have on hours of service, trucking and the economy.
It reminded me of so many conversations I’ve had with people who could very well be this young man’s boss. Many inside and no one outside the for-hire fleet world seems to know what’s coming when the Federal Motor Carrier Safety Administration’s (FMCSA) ELD mandate takes effect in December.
Hopefully there will be fewer collisions related to driver fatigue. And how about companies, and subsequently drivers, finally getting a full accounting of their time and hopefully paid for it? No more shady work-arounds in order to meet impossible schedules.
If the supply chain management grad wasn’t familiar with ELDs for tracking hours of service, then International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP) are not even on his radar. And that’s where fleet tax compliance managers need to pay attention.
Already I see ELD vendors telling potential customers, “Don’t worry. Your ELD has GPS. We can do your IFTA and IRP reporting.”
They can, but it’s up to you to make sure the ELD vendor fully understands IFTA/IRP requirements and the limitations of using GPS data on distance-based tax returns.
Here’s what you should know (that your ELD sales rep probably doesn’t):
By itself, an ELD can’t calculate distance. Its GPS can only read satellite signals and record where a vehicle is (or where a device is) based on latitude, longitude, date and time (some systems also gather an odometer reading). You need software – a routing program or transportation management system – to make the distance calculation.
This hardware-software combo is reliable but not perfect.
Hardware can malfunction. And there are places like canyons and cities where signals naturally degrade, creating gaps in coverage. When it comes to software, there is no standard algorithm to turn GPS data into points on a map. Given the same information, one program might put your truck on a side road while another shows it on the highway.
This is why IFTA and IRP auditors do not accept distance summaries generated by routing or fleet management software as proof of distance traveled. They want raw GPS data – each ‘ping’ –so they can verify for themselves whether your distance reports are correct.
It’s a lot of pings
Do you keep these records or does the ELD vendor? If so, how easy is it to get access to all those pings?
If you operate a heavy truck with IFTA credentials, you’re required to report all distance that vehicle travels, including empty, dead-head and bobtail miles; personal travel; and even non-taxable miles. Is your ELD set up to do that? Or is it just capturing hours of service data?
Furthermore, IFTA requires licensees to preserve all records used to create quarterly tax returns and/or annual tax returns for four years from the tax return due date or filing date, whichever is later. IRP requires fleets to preserve records for three years after the close of the registration year. If you also use GPS data for IRP licensing, you’re now obligated to keep it for five-and-a-half years.
What if there are gaps in data and you need to recreate missing portions of trips? All of those paper-based records you’d love to do away with – driver expense reports, trip sheets, dispatch records, fuel receipts – will come in handy.
As you pore over the new ELD rules, take time to review how your fleet manages GPS data and electronic records across all areas of compliance, beginning with IFTA and other distance-based taxes.
Maybe Elvis is alive: electronic logs and vehicle inspection systems. Thank you…thank you very much.
Sandy Johnson has been managing IFTA, IRP, and other fleet taxes for more than 30 years. She is the author of the free book 7 Things You Need to Know About Fleet Taxes, and operates North Star Fleet Solutions (www.northstarfleet.com), which provides vehicle tax and license compliance services for trucking operations. She can be reached at 1-877-860-8025. To read more of Sandy’s articles, visit www.FleetTaxPro.com.
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