How to Achieve Fuel Tax Compliance
Increase Automation to Reduce Costs and Avoid Errors:
Downstream energy suppliers, distributors, and retailers are subject to various complex fuel sales and other taxes at the federal, state, and local levels. Keeping up with all rules, fees, and submission requirements while ensuring accurate and on-time monthly submissions involve high operational costs. Taking shortcuts to avoid these costs can lead to tax errors and carry the risk of hefty fines and penalties.
In Motor Fuel Compliance, three key business processes have the most significant impact on supplier tax compliance costs and audit risk.
- Sales claim tax calculation
- Monthly excise tax return
- Preparing for an audit
In each case, they outline the traditional process automation approaches currently used by many fuel suppliers and contrast them with best-practice processes and technologies to optimize cost savings and risk aversion.
Tax Calculation for Sales Claim:
To claim indirect taxes accurately, you must include tax determination and calculation steps as part of the back office or ERP system sales billing pricing process. By automating tax decisions, you can consistently and accurately calculate complex fuel tax sets that cover multiple jurisdictions, products, and tax types. Timely cash flow requires that the pricing and billing process generate invoices as soon as the delivered bill of lading becomes available. Accurate tax decisions also need ongoing tax audits to keep essential data such as tax laws, tax rates, business partner licenses, and exemptions up-to-date.
Traditional Automation Approach:
Most back office systems are designed to automate simple sales and usage tax calculations, but they cannot handle excise tax decisions’ complexity. Building and maintaining this code to support complex and changing tax laws is a costly and ongoing IT challenge. Also, the tax department’s burden to investigate tax changes carries and the tax tables. The changes to the Motor Fuel Compliance set are considerable. Some back office systems are specially designed for bulk fuel distributors and can directly support excise tax calculations. This approach eliminates the need to customize IT, but it does not ease the tax department’s burden to investigate tax rates and rules and maintain and test tax rates.
Find a Solution:
The solution to ensure accurate environmental compliance reporting and the only way to do so is to adopt a reliable and repeatable business process. Most organizations leverage tax departments that already have transaction data experience, as most health, safety, and environmental (HSE) organizations and environmental groups do not have access to or are familiar with the transaction details required for reporting. You will want to. Excise tax involved in Motor Fuel Compliance.
About Juno Logix:
Juno Logix, a wholly owned subsidiary of Juno Logix, provides strategic software automation solutions for global indirect tax decisions and excise tax compliance for the energy industry. Juno Logix solutions provide complete visibility across your tax organization, reducing risk-reducing fines, fees, and fines while improving your ability to track, predict, and report your tax obligations. Headquartered in Houston, Texas, Juno Logix processes billions of dollars in automotive fuel sales tax annually.
Juno Logix compliance solutions automate accurate reporting and payments to the appropriate state and federal jurisdictions. Juno Logix decisions calculate transaction taxes to ensure accurate invoices as part of the financial workflow, significantly reducing the risk of credit and rebilling and overpayments and underpayments.
The Complexity of Motor Fuel Compliance is Staggering:
As a fueling, distribution, or retail tax manager, you know that excise tax audits can be conducted without notice from your jurisdiction, whether in a state, county, city, or federal government.