IFTA, Inc. International Fuel Tax Association

1st Period Comments on FTPBP #4 - 2024

Jurisdiction	Position	Comments
ALBERTA	Undecided	Alberta is supportive of the intent of the ballot but shares the concerns expressed by other member jurisdicitons about the cost and effort this requirement could impose on member jurisdictions and carriers if the information was not sourced internally. To avoid this Alberta would look to acquire the required information from registry data that has already been collected. As currently drafted, Ballot Proposal 04-2024 does not directly restrict member jurisdictions from obtaining the required fleet information from other sources. However, a member jurisdiction obtaining the information other than from an applicant would not relieve the applicant of its obligation to provide the information at the time of application or the updated listing with the quarterly return. Furthermore, a base jurisdiction obtaining updated fleet information other than from a licensee would not relieve the base jurisdiction from its obligation to prescribe the form on which a licensee provides its updated fleet listing with each quarterly return. Accordingly, the Ballot as currently proposed may not permit a member jurisdiction to obtain and provide the fleet information on behalf of its applicants or licensees.
BRITISH COLUMBIA	Oppose
IDAHO	Oppose	Idaho is not set up to track this information and would be costly endeavor to incorporate this into our system.
ILLINOIS	Oppose	More discussion is required to fully vet the concept here. The additional resources required to implement the changes this ballot makes as well as the ongoing expense of meeting the additional data gathering/maintaining are not justified to meet the collection and administration of motor fuel use taxes. In Illinois, the IFTA program is not only under a different agency than the IRP program, but also it is under a separate Constitutional Officer of the State (Governor’s Office – IFTA; Secretary of State – IRP). So, while it is prudent to position IFTA for anticipated future motor fuel use tax changes, this wholesale addition of vehicle registration data collection would add considerable expense to our IFTA administration with little, if any, additional return on investment while also duplicating much of what the IL Secretary of State does under the IRP program. While we acknowledge that having this information could assist audit functions, the additional resources required to obtain and maintain this data may be better spent, for example, on direct audit activity. Finally, rather than adopt now with a delayed implementation date, IL prefers more robust discussion now and ballot changes, if needed, at a later date. Specific ballot issues, should the ballot succeed: Line 3- Definitions. The current definition of “Fleet” should be retained. That word is used throughout the agreement. A new term “fleet list” or “fleet listing” should be added. Proposed definition: “Fleet listing” means the list provided by a licensee or applicant that includes, for each vehicle in the fleet, the information under P140.” Strike the last sentence in the definition of “fleet” in the ballot; it is not definitional, but substantive and already appears in R625 changes in the ballot. Line 14- R625: Keep the caption “Display of Decals” and just add “Vehicle Identification” as follows: “R625 Display of Decals; Vehicle Identification”. “Fleet listing” “fleet vehicle listing” “Fleet list” – pick a term, define it, and stick with it. “Will” – use the word “shall” or “must”. “Will” is passive or future, not imperative. Line 32- Concern: “requirements in the data validation plan”: The data validation plan refers to the transmittal and the data validation plan does not address vehicle data information. The Intent of the ballot states, “The qualified motor vehicle list operated under the license will be uploaded to the clearinghouse or other database developed by IFTA, inc.” So, is the data supposed to go on the transmittal, the demographics file, or a file for a system yet to be developed? Implementing requirements for the new data will increase resource costs for Illinois without a corresponding increase in motor fuel use tax revenues. It seems premature to accept the burden of this ballot when there is no clear plan, place, or use for the collected data. Thus, the need for more robust discussion. Line 60- P145: This muddles whether the info. in P140 is “application” information or just information acquired from third parties/other sources. This needs more work to intersect with P140. For example, can the applicant authorize the jurisdiction to acquire P140 info. from other sources? If so, a provision is likely needed to have applicant verify or correct the information received from third parties.
INDIANA	Oppose	Indiana is opposed to this ballot. The required investment in infrastructure would be significant for jurisdictions and motor carriers while the benefits to audit and enforcement would be minimal. Future improvements to the IFTA Plan should be focused on efficient and effective methods that promote and result in a reduction in costs and administrative support for all industry partners, not an increased burden. Creating a new system/program at the vehicle level is not required.The current fleet level method has been very successful for the last forty years and continues to function appropriately. This proposed change would not increase fuel tax revenues. The History/Digest section of the ballot refers to several issues that are concerning: different taxation method that replaces fuel taxes, new definition of qualified motor vehicles, inclusion of vehicles less than 26,000 lbs., and inclusion of passenger vehicles. These topics are very complex, are unrelated to the current ballot, and would be problematic to consider when deciding how to vote on this ballot.
KANSAS	Support	We support this ballot as we have always asked for a list of vehicles when completing an application and every year after when submitting a renewal. Our IFTA and IRP accounts are not on the same system so we cannot easily compare to what IRP has on file, if needed. Having a list of vehicles provided has cut down on issuing the carriers extra decals, when not really needed. We also ask for an updated list of vehicles when additional decals are ordered, it has made the carriers more accountable for keeping vehicle records for audit purposes.
Law Enforcement Committee		Law Enforcement Committee Comments for IFTA Ballot Proposal 04-2024 Law enforcement personnel continue to see an increase in counterfeit and altered IFTA credentials. When law enforcement personnel are attempting to investigate suspected fraud during roadside contacts, significant research is sometimes required that necessitate contacting base jurisdictions. Law enforcement operations are 24/7 in nature, whereas jurisdictions typically cannot be reached outside of normal business hours. Having the ability to search a system via a VIN to make sure the qualified motor vehicle is included on an IFTA license for taxation purposes would greatly enhance law enforcement’s ability to combat this type of fraudulent activity by more easily being able to determine if a particular vehicle is associated with an active IFTA account. Additionally, law enforcement personnel also encounter the fraudulent use of authentic IFTA credentials. This occurs when credentials (both decals and licenses) are unintentionally left in/on a qualified motor vehicle that is sold are then fraudulently used by the next carrier. This type of fraudulent activity is even more difficult to detect by law enforcement and represents a significant impact to the fuel taxes collected by jurisdictions. In some cases, the carrier may actually have an active IFTA account, but not be reporting that particular vehicle, thus saving themselves a significant amount in fuel taxes at the expense of jurisdictions. Having a way to verify that a specific qualified motor vehicle is being reported for IFTA taxation purposes would greatly enhance law enforcement’s ability to counter these situations. Law enforcement’s goal is to enhance highway safety and ensure jurisdictions receive proper revenue for infrastructure as part of the highway safety mission. The Law Enforcement Committee believes that this ballot would greatly enhance enforcement’s ability to do so, while also making IFTA enforcement more efficient, equating to less time that qualified motor vehicles are delayed while verifying IFTA credentialing. The Law Enforcement Committee recognizes that this would pose some challenges to enforcement agencies, such as the ever-constant battle with internet connectivity in some jurisdictions. However, we believe this ballot is a step toward embracing the future evolution of qualified motor vehicles and, therefore, we support this ballot.
MAINE	Oppose	We do not agree with this ballot. We have had no problems on audit obtaining vehicle information. During pre-audit process we will conduct a vehicle analysis from available IRP registrations. We also will ask for addition vehicle information during audit. If this is a concern for other jurisdictions; we suggest that a ballot be proposed to address this audit issue. The ballot should include clear decal recordkeeping requirement for carriers and a requirement for a decal reconciliation on audit with punitive measurements for carriers for unaccounted for decals. Programing to keep a list of vehicles for this will cost all jurisdictions. Including vehicle information with IFTA would make that information confidential under Maine laws. Use for roadside enforcement will require a new CH access agreement. States should keep in mind that if the IFTA return is used for a possible national road use tax, the information contained in the return could become federal tax information with limited access by states such as the federal HVUT 2290.
MANITOBA	Oppose
NEBRASKA	Oppose	Nebraska is opposed to this ballot for many of the reasons already voiced in the comments by others. In addtion to what others have said, NE has concerns about the language struck in section R605. Does this not open the door for jurisdictions to require additional credentialing requirements for IFTA qualified vehicles? Isn't that the reason IFTA started was NOT to require jurisdiction specific credentials? In addition, to address the law enforcment concern - it would be much easier for motor vehicle registrations to capture an IFTA license number at the time of registration (similarly to how a DOT # responsible for safety is captured today by all US jurisdictions).
NEW BRUNSWICK	Oppose
NEW HAMPSHIRE	Oppose	New Hampshire opposes this ballot for many of the same reasons stated by Illinois, Maine, and Oklahoma. As New Hampshire reviews vehicle information related to all IFTA applications prior to approval, and then obtains a vehicle list from the licensee as part of our pre-audit process, we don’t see the need for this amendment. New Hampshire feels it should be left to each jurisdiction to determine how they verify the number of decals they issue to each licensee, and how to obtain vehicle information related to an IFTA license during an audit.
NORTH CAROLINA	Oppose	North Carolina shares many of the concerns raised by other jurisdictions and strongly opposes this ballot. The ballot fails a cost-benefit analysis and its poor drafting will cause additional unintended consequences that will inhibit fuel tax collection. Cost-Benefit Analysis As noted by many jurisdictions, there is no data to support the high costs placed on: (1) IFTA, Inc., whose costs to implement this ballot will be borne by the member jurisdictions; (2) the member jurisdictions who must implement these reporting requirements, and (3) licensees who must comply. It appears that the main reason for moving forward with this ballot was based on the History/Digest, which provides: "A change in the definition of qualified motor vehicles most likely would necessitate a requirement for vehicle-specific identification when credentialing for IFTA." Potentially, yes. However, that is not what is being proposed here: the definition of qualified motor vehicle is not amended. North Carolina agrees with Oklahoma that expanding the definition of qualified motor vehicle would require changes on a federal level (ISTEA) Therefore, this ballot is premature and cannot be used as a reason to move forward with this ballot. The sponsor then supports the ballot for providing, in part, the following reasons: "IFTA is hampered by the absence of vehicle specific data being collected by base jurisdictions at the time of licensing and the maintenance of same perpetually" Jurisdictions that do not charge for decals place "compliance in jeopardy through the potential misuse of decals." The ballot "will help ensure that the operations of all vehicles used during the subject reporting period(s) have been reported; which will further enhance a base jurisdiction’s ability to identify the propriety of fuel use tax reporting in all affected member jurisdictions." There is no data to support that the ballot will improve tax collections. Indeed, all the above reasons for the ballot are focuses during the audit process. North Carolina audits begin with obtaining a vehicle list, which includes performing a decal inventory. The list will not change this process and provides no additional measures to identify issues that would not have been otherwise identified. However, the key failure in this ballot is data accuracy. Without data accuracy, the sponsor will not achieve any of the purported benefits, and the ballot does not provide a mechanism to ensure accuracy. If the licensee submits false vehicle information, what is the penalty? There is no positive feedback loop to allow the jurisdiction to rely on the data. Despite the sponsor providing that this will be "a definitive source to maintain fleets associated and reported on a license," North Carolina does not see a path forward to achieve this. Without the ability to rely on the data, the list will have limited value. All the above concerns provide minimal benefits. The costs placed on IFTA, Inc., jurisdictions, and licensees does not seem to have been considered. Ultimately, the costs of requiring this list be maintained will exceed any potential revenue gains. This ballot is a net loss for member jurisdictions. This causes North Carolina great concern. Drafting Concerns North Carolina also has significant concerns with the ballot language. However, to keep this comment short, North Carolina will note three concerns. First, the changes to definition fleet are precarious. It is unclear whether a jurisdiction can consider qualified motor vehicles during an audit that were not reported. In other words, if the motor vehicle was not reported, it was never a part of the fleet, even if it was. Second, why did the sponsor remove language from R605? A license and decals does not, by itself, allow a licensee to operate in all member jurisdictions. There are other requirements, such as IRP. Third, North Carolina does not understand P145. If the data can be collected from someone other than the licensee, should the licensee still be required to submit and update the data? What if there is a conflict in data? How is this resolved? How does this promote the "definitive source" theory promoted by the sponsor? It seems as if there are multiple sources.
NOVA SCOTIA	Support
OKLAHOMA	Oppose	The ballot proposal raises concerns about the cost and authority of implementing a new vehicle registration system under the International Fuel Tax Agreement (IFTA). The proposal implies (without saying it) expanding IFTA’s scope to include distance-based taxes in the future, but this exceeds the authority granted by Congress and could lead to a costly program without clear benefits. The proposal suggests audit benefits without providing a cost benefit analysis justifying the increased development and personnel costs. The ballot proposal suggests researching a shift in IFTA, Inc.'s role to potentially adopt mileage-based user fees for infrastructure funding, despite current limitations by ISTEA on taxing fuel only. It also proposes using IFTA for jurisdictional or national road use taxes, which would exceed the authority granted by Congress. The CEO of IFTA recently expressed a desire to amend ISTEA to tax distance, but without such changes, this proposal risks overstepping its bounds and creating a costly program without clear benefits. Additionally, altering the definition of qualified motor vehicles could lead to new credentialing requirements, a change deemed irresponsible without proper authority and based solely on speculation. The proposal would significantly increase the system development and personnel costs of IFTA, Inc. without disclosing what those costs might be and ultimately how those costs would be passed onto the jurisdictions. The proposal’s justification based on law enforcement needs is concerning. While vehicle-specific decals may benefit law enforcement, IFTA’s primary goal is equitable fuel tax distribution among jurisdictions. That goal has been largely met for the entire history of IFTA. There is a lack of empirical data to support any fuel tax deficit or the cost-benefit of transitioning to vehicle identification number (VIN) specificity. The proposal presents unnecessary additional vehicle identification requirements based on unverified assumptions, despite IFTA’s historical success in fair fuel tax allocation since its inception.
ONTARIO	Oppose	The administrative burden to update our systems and processes to collect and maintain this level of detailed information, and additional burden this would place on the industry, outweighs the benefits to our compliance efforts. The intent of the ballot is specific to allowing jurisdictions to audit and verify the vehicle(s) operated under the IFTA license are reported. For audit purposes, collecting a VIN would be sufficient. If this ballot moves forward, or for a future iteration, we suggest the following change: R221 defines “fleet” as “one or more vehicles.” The proposal adds to the definition, “…The fleet will be maintained and updated…” This updated definition seems to conflate into one term the vehicles themselves and the list of vehicles. It may be better to define a new term, e.g., “fleet listing” as used in R625.
PENNSYLVANIA	Undecided
PRINCE EDWARD ISLAND	Support
QUEBEC	Support	From the audit side , we are delighted to have this information since it will facilitate the auditors work in reconciling the decals requested vs the holder's units. From a legal perspective, it would be necessary to assess whether this proposal would require an amendment to our law to provide for the obligation to send and update this list.
SASKATCHEWAN	Oppose	There is insufficient data provided to quantify the extent of the issues attempting to be addressed by this ballot. Without knowing the extent of the issues, it is difficult to determine if the added costs to jurisdictions of implementing the ballot are justified.
Stakeholders	Oppose	Chuck Ledig - IAC Chair The concept of vehicle (i.e. VIN) specific IFTA credentials has been a topic of debate throughout the IFTA community for several years, gaining very little traction amongst jurisdiction and industry partners. Given the slightly positive to considerably negative sentiment for such a move at this time and the lack of clarity around a path to this end, the fact that this concept has risen to the level of a formal ballot upon which there will be a vote at the ABM, is concerning, and something that industry strongly opposes. Even more concerning are the very real, detrimental impacts to jurisdiction, enforcement, and our industry if this ballot passes in its current form; a form that lacks critical details that will absolutely be essential for successful outcomes. Beyond the inefficiencies that would result from passage in its current form, the ballot history / digest contemplates a number of topics whose supporting arguments are theoretical and have enormous potential implications as foundational elements of a ballot. The first of which is, redefining Qualified Motor Vehicles to include passenger vehicles in the future. A proposed change of this magnitude with so many unanswered questions, and a seeming need to alter Federal legislation (legislative amendments to provisions under ISTEA, the Intermodal Surface Transportation Act of 1991) in the hope of a possible, arguably remote, chance of a move to include such vehicles seems speculative, not a prudent foundational element. The history / digest also establishes several other contributing factors for the ballot’s premise. In this regard, the ballot focuses on the potential misuse of decals. With specific regard to this topic, no empirical data has been publicly presented to substantiate or quantify the impacts of “placing compliance in jeopardy through the potential misuse of decals.” Any significant action taken to address bad actors at the expense of the vast majority of carriers who are complying with the program requirements is counterintuitive and will only slow down the ability of interstate carriers to operate. Any solution to cover the small portion of carriers who may be engaging in IFTA decal fraud must not burden jurisdictions or industry. If the issuance of excess decals is a concern, then there are simpler more effective ways to control issuance. Looking at the registration data for the carrier, or reported vehicle count under FMCSA records, for example, are means of identifying fleet size to gauge the number of decals issued. Collaboration with other agencies (e.g. FMCSA, IRP, etc.) could provide visibility to these elements since the data already exists and could be provided to the IFTA function. Longer term, it is debatable as to whether decals will be necessary at all. On the topic of DOT information, reviewing the proposed changes, P130 USDOT / NSC, the motor carrier safety information has no tie to fuel taxes. Safety measurement belongs to the license plate process where Performance and Registration Information Systems Management (PRISM) is present. The PRISM program ensures unsafe carriers are kept off the road. Forcing carriers to provide the USDOT and jurisdictions to program for it, does not further road safety only excess administrative effort and cost. With respect to concern that nothing currently exists that would provide an auditor with "a complete profile of vehicles” operating under a carrier’s account, quite to the contrary, this is often the first request that a jurisdiction will make of a carrier under audit: to provide a complete listing of vehicles to which credentials have been issued and have been filed on tax returns. The long-established Audit Procedures and Procedures Manual provide for a very robust process to verify and ensure carrier compliance in this area today. As this ballot relates to advancing IFTA, Inc. to accommodate vehicles that would qualify for IFTA under a broader definition of commercial QMVs (i.e. CMVs 10,000 to 26,000 lbs.), it should be made clear that these weight categories would not be subject to fuel tax netting, only distance-based jurisdictional tax models. In terms of objectively evaluating the path forward for a proposed change of this magnitude, industry measures it against questions that imbue three core tenets: 1) Is it efficient? 2) Is it easy to understand and comply with? 3) Is it fair to all who qualify? On considerations under each of these core tenets, industry offers the following: Efficient: - Without an articulated path to proper technology, and systems integrations to support such a requirement, requiring carriers to document and file vehicle demographics and demographic changes through undefined, and more likely inconsistent, jurisdictional processes and programs would create onerous redundancies and inefficiencies for jurisdiction and industry alike. One such example that all must all bear in mind is that VIN, DOT, make, model and plate information are already being captured under the International Registration Plan (IRP) structures today (the vast majority of IFTA qualified vehicle are registered under IRP). Expecting jurisdictions to store the same data points in two different places as well as carriers to provide the plate information is creating unnecessary redundancy and effort for both. Integrations with the IRP Data Repository (IDR) over time could provide these data elements with no additional effort. - Specific to make and model, they are irrelevant if the VIN is known. VIN decoder programs are readily available that allow these attributes to be derived from respective character positions within the VIN. - Requiring license plate information as a prerequisite to IFTA registration will result in additional operating delays, with the carriers having to procure a license plate / registration prior to completing an IFTA application that then would have to be submitted with duplicated data to begin the process of IFTA decal issuance; restarting the clock to operate vehicles. Clear - There is substantial subjectivity and many open questions embedded throughout the ballot document, from possible use for national road use tax to what “may lead to one integrated database of vehicle information”; “may”, being the operative word. - The recent contemplation of carrier DOT requirements is cause for concern. Beyond what has already been mentioned on DOT, it is not currently within IFTA’s jurisdiction to enforce DOT requirements. It is not clear why this information would be critically needed. - As mentioned, this ballot lacks clearly articulated plans to arrive at specific systems that will create a platform for efficient administration and uniformity of process. Without this, there could be dozens of varying jurisdictional approaches to data capture, not only at the time of credentialling, but throughout a qualified vehicle’s lifecycle. Variations that will, most certainly, lead to delayed legalization, if not by weeks, at the very least, days for qualified vehicles. - This ballot does not contemplate, or consider, owner-operator / independent contractor leases, or operational leases, with respect to DOT reporting: who’s DOT is to be reported; the account holder’s DOT often varies from the DOT entity. Will this arrangement be prohibited under the proposed structure (if so, this becomes a consideration under, Fair)? Fair - Vehicle-specific credentials would likely prevent jurisdictions from issuing “inventory” decals. This is particularly concerning for larger fleets that maintain decals in inventory, not specific to a vehicle today, for issuance to portions of their fleets as they are refreshed throughout the year. Vehicles that would otherwise be able to operate in less than 24 hours would be faced with the application process described above. - This ballot does not contemplate or consider leasing companies (U.S.C. 49 part 376 subpart C), where the lessor’s IFTA account (provided for under IFTA R500) could contain any number of lessee’s that operate under DOT numbers that are not related to the leasing company. Taking into account all of these considerations, the inefficiencies that would result from an implementation of this ballot in its current form would have a cumulative effect on our industry equating to hundreds of millions of dollars in additional operating expenses (foregone revenue, accumulated depreciation, unapplied overheads, etc. that result from operational delays) and delayed freight each year. Expenses and impacts that will, ultimately, be borne by the US consumer. Full participation in the IFTA was born out of the Intermodal Surface Transportation Act of 1991 (ISTEA). One of ISTEA's chief goals for Motor Carriers was to develop a "National Intermodal Transportation System that is economically efficient and environmentally sound, provides the foundation for the nation to compete in the global economy, and will move people and goods in an energy-efficient manner." IFTA met the goal; it brought, and continues to bring, tremendous efficiency to the transportation industry. IFTA has worked well for stakeholders for 40+ years and will continue to work for its stakeholders for decades to come. Fundamental changes to this successful framework should come through lengthy debate, planning and consensus amongst all stakeholders. To this point, Industry would support a VIN-specific credential under two conditions, which the current ballot does not achieve: 1. It would require a clear plan for the development and deployment of an online software application that allows for the centralized, uniform, efficient and timely administration of the credential (i.e. would leverage integrations with other government applications to mitigate the issues outlined, above). 2. Complete and total elimination of the physical IFTA decal- which is outmoded and will be unnecessary in the long term (as evidenced throughout references to Law Enforcement functions and integrations in the history / digest section of the ballot itself). In short, Industry reiterates its staunch opposition to this ballot in its current form. If passed, it will not only bring tremendous burdens; it will run contrary to the very spirit under which IFTA was born.
WASHINGTON	Undecided
WYOMING	Undecided
Support: 4 Oppose: 14 Undecided: 4

IFTA Ballot Comments

1st Period Comments on FTPBP #4 - 2024

Address:

(480) 748-5763