With more states charging fuel taxes on electric vehicles (EVs), motor carriers must know how to report operations of electric-powered qualified motor vehicles in their fleets. Various alternative fuels – including electricity – must be reported on tax returns under the International Fuel Tax Agreement (IFTA). Indiana is the latest to embrace the trend.
States have discretion as to the actual format, whether reporting is done with paper forms or via electronic filing. However, these basic elements must be included in the reports:
- Report the total distance in the jurisdiction for the vehicles reporting EV as a fuel type.
- Report the taxable distance in the jurisdiction for the vehicles reporting EV as a fuel type. Report “zero” for taxable distance in jurisdictions that do not impose tax on EV as a fuel type.
- Report as tax paid fuel any electricity placed into the supply storage unit of the EV on which tax was paid. Retain documentation as proof of tax payment.
- Report, as part of total fuel, any electricity placed in the supply storage unit of the EV. For jurisdictions that do not tax electricity as a fuel or impose a consumption tax on taxable distance, electricity purchased in those jurisdictions must still be reported as part of total fuel. This allows calculation of the correct consumption rates and appropriate fuel taxes.
- Calculate a consumption rate (xx.yy per kWh) for the EV fuel type by dividing the total distance by the total fuel rounded to two decimal places (similar to the MPG or KPL calculation).