It’s Tax Season! Are You Paying the Correct Fuel Taxes?

Many fleet managers, controllers, and CFOs might be surprised if they discovered they were overpaying fuel invoices because they included line items disguised as government taxes and fees.  At Sokolis, we‘re not surprised because we see this happen frequently.  Prior to becoming a Sokolis client, these companies typically just signed off on fuel invoices that contained “special” taxes or environmental fees.  These bogus fees are nothing more than an additional revenue stream for the fuel supplier.  However, in some other cases, we’ve also discovered legitimate taxes were not charged when the company was actually liable for the tax.

A few examples: By not having the proper forms on file with the taxing state, one company was paying state excise tax for deliveries of diesel fuel used for off-highway purposes.  Receiving 7,500 gallon transport loads of fuel amounted to overpayments of more than $1,500 of tax per load.  If the proper forms had been filed, there would have been no tax liability.  Worse yet, after filing the correct forms, the company could not file for a retroactive fuel tax refund.

Another company receiving small bulk deliveries of fuel had so many additional charges on their invoice that the price was equivalant to $8.25 per gallon on a delivery of 200 gallons.  The company never questioned these charges and they were paid.  Fortunately we were able to recoup that money for our client from the fuel vendor.

Here’s one more, due to a misinterpretation of the tax law by the client and fuel vendor, a sales tax exemption certificate was improperly submitted and relied upon to eliminate sales tax that should have actually been charged on the fuel  We rectified the situation, the client paid the taxes due, and the vendor updated their records accordingly. This client was saved from penalties and interest had this not been discovered in a timely fashion.

These are just a few examples of what we discover every day for our clients at Sokolis.  Our clients have the peace of mind knowing that fleet fuel experts are auditing every aspect of their fleet fuel transactions. Who is watching your back?

Please feel free to contact Conor Proud at Sokolis, cproud@sokolisgroup.com or 267-482-6159, if you have a fuel tax situation that you would like to discuss further. We are the nation’s leading independent fuel management consulting team and can help ensure you are paying the correct taxes on fuel.