IFTA Annual Report Database IFTA Annual Report Database PresentationPresentation

IFTA Annual Business MeetingIFTA Annual Business MeetingJuly 2005July 2005

Halifax, Nova ScotiaHalifax, Nova Scotia

Presented byGarry Hinkley

IFTA Board of Trustees

The Requirements con’tThe Requirements con’t P1100P1100 Base Jurisdiction ReportingBase Jurisdiction Reporting

P1100P1100 Annual ReportingAnnual Reporting

.100.100Reporting RequirementReporting RequirementAll jurisdictions which are All jurisdictions which are

members members under this Agreement shall under this Agreement shall submit an submit an annual report by annual report by March 1 for the March 1 for the preceding preceding calendar year to the calendar year to the repository for distribution to each repository for distribution to each

member jurisdiction. member jurisdiction.

The Requirements con’tThe Requirements con’t

.200.200 Reporting PeriodReporting PeriodThe report shall be for the The report shall be for the period period beginning with the date beginning with the date of of membership through membership through December 31 and for each December 31 and for each calendar year thereafter.calendar year thereafter.

The Requirements con’tThe Requirements con’t.300.300 Required InformationRequired Information

Content of the annual report to member jurisdictions shall include:Content of the annual report to member jurisdictions shall include:

.005.005 Number of IFTA accounts which shall consist of all Number of IFTA accounts which shall consist of all licensees that are issued an IFTA license and decals for licensees that are issued an IFTA license and decals for a a licensing year excluding licensees who were issued licensing year excluding licensees who were issued credentials in credentials in error and returned those credentials to error and returned those credentials to the base jurisdiction;the base jurisdiction;

.010.010 Number of cancellations and suspensions/revocations;Number of cancellations and suspensions/revocations;

.015.015 Number of audits;Number of audits;

.020.020 Number of audits with assessment;Number of audits with assessment;

.025.025 Current tax rates; andCurrent tax rates; and

.030.030 Unusual activities within a member jurisdiction that Unusual activities within a member jurisdiction that could could affect an audit.affect an audit.

The Requirements con’tThe Requirements con’t P1120 TAX RATE REPORTINGP1120 TAX RATE REPORTING

.100.100 Reporting RequirementReporting RequirementMember jurisdictions are required to notify the repository at Member jurisdictions are required to notify the repository at the earliest the earliest possible time of a change in their tax rate. The possible time of a change in their tax rate. The repository will then repository will then immediately notify each member immediately notify each member jurisdiction.jurisdiction..200.200 Distribution of Tax Rate and Conversion Distribution of Tax Rate and Conversion InformationInformationThe repository will disseminate to the member jurisdictions The repository will disseminate to the member jurisdictions the U.S. and the U.S. and Canadian tax rates converted in accordance Canadian tax rates converted in accordance with the procedures with the procedures specified in the IFTA Procedures Manual. specified in the IFTA Procedures Manual. The repository will also provide The repository will also provide an information table that will include an information table that will include the converted tax rates and the converted tax rates and measurements for miles/kilometers and measurements for miles/kilometers and gallons/liters. The repository gallons/liters. The repository shall provide the tax rates and shall provide the tax rates and conversion information to all member conversion information to all member jurisdictions by the first jurisdictions by the first Monday of each quarter.Monday of each quarter..300.300 Failure to Report Tax Rate ChangesFailure to Report Tax Rate ChangesIf notification of a tax rate change is not received by the other If notification of a tax rate change is not received by the other jurisdictions at least 60 days prior to the due date of a quarterly tax jurisdictions at least 60 days prior to the due date of a quarterly tax return for which the change is effective, the other jurisdictions will return for which the change is effective, the other jurisdictions will be be relieved from taking extraordinary measures to implement the relieved from taking extraordinary measures to implement the change. The jurisdictions that failed to provide adequate notification change. The jurisdictions that failed to provide adequate notification may, however, collect any additional taxes due directly from the may, however, collect any additional taxes due directly from the licensees in the other jurisdictions.licensees in the other jurisdictions.

The Requirements con’tThe Requirements con’t P1130P1130 Reporting of Other InformationReporting of Other Information

Every member jurisdiction shall Every member jurisdiction shall advise advise the repository of all the repository of all changes regarding changes regarding tax-exempt tax-exempt miles/kilometers, non-miles/kilometers, non-taxable taxable fuels, tax-exempt vehicles, or fuels, tax-exempt vehicles, or any any other changes affecting the other changes affecting the administration of the Agreement. administration of the Agreement.

Analyzing the DataAnalyzing the Data Total Number of IFTA Accounts ReportedTotal Number of IFTA Accounts Reported: :

For 2004, the membership reported a total of For 2004, the membership reported a total of 271,146 IFTA accounts. This is up from 257,875 for 271,146 IFTA accounts. This is up from 257,875 for 2003. This is an increase of five percent.2003. This is an increase of five percent.

For 2004, the five largest jurisdictions reported a For 2004, the five largest jurisdictions reported a total of 62,731 accounts, and the five smallest total of 62,731 accounts, and the five smallest reported a total of 2,943. The mean average reported a total of 2,943. The mean average number of accounts per jurisdiction was 4,675 number of accounts per jurisdiction was 4,675 (4,446 for 2003), and the median was 3,845 (4,215 (4,446 for 2003), and the median was 3,845 (4,215 for 2003). for 2003).

Analyzing the Data con’tAnalyzing the Data con’t Decals IssuedDecals Issued: :

For the 2004 license year, the jurisdictions reported For the 2004 license year, the jurisdictions reported issuing issuing 2,948,142 decals. This compares to over 4.1M 2,948,142 decals. This compares to over 4.1M reported for reported for 2003. (almost the entire reduction came from 2003. (almost the entire reduction came from one one jurisdiction. It is possible this jurisdiction previously was jurisdiction. It is possible this jurisdiction previously was

reporting reporting a “set” as two decals, or had some other a “set” as two decals, or had some other anomaly.) anomaly.)

The average number of decals per licensee was 10.9. The average number of decals per licensee was 10.9. One One jurisdiction reported an average of 60 decals per jurisdiction reported an average of 60 decals per licensee. licensee. (Yes, the same jurisdiction as above, reporting (Yes, the same jurisdiction as above, reporting the most decals the most decals issued.) The lowest average was 3.2 issued.) The lowest average was 3.2 decals per licensee. decals per licensee.

Note: decals should be counted as a set=1. The count should be Note: decals should be counted as a set=1. The count should be for the for the

license year.license year.

Analyzing the Data con’tAnalyzing the Data con’t Decal fees:Decal fees: There is wide variation among jurisdictions in the fee There is wide variation among jurisdictions in the fee

charged for decals. The average fee was $3.90. In general, charged for decals. The average fee was $3.90. In general, jurisdictions charging the least seemed to issue the most decals per jurisdictions charging the least seemed to issue the most decals per account. account.

Fee Range Fee Range # of Jurisdictions# of Jurisdictions Average # of decals/acctAverage # of decals/acct>$20>$20 3 3 5.4 5.4>$10 to $20>$10 to $20 0 0 -- -->$5 to $10>$5 to $10 1111 6.2 6.2>$0 to $5>$0 to $5 2424 10.810.8no feeno fee 2020 14.014.0

NOTE: Not adjusted for exchange rate.NOTE: Not adjusted for exchange rate.

Jurisdictions charging little or no fee for decals should pay particular Jurisdictions charging little or no fee for decals should pay particular attention that licensees are not acquiring more decals than they need; attention that licensees are not acquiring more decals than they need; and that decals are not being misused. Serializing decals and passing and that decals are not being misused. Serializing decals and passing decal serial information to the Clearinghouse could help with this decal serial information to the Clearinghouse could help with this problem problem

Analyzing the Data con’tAnalyzing the Data con’t Cancelled, Suspended, and Revoked Cancelled, Suspended, and Revoked

LicensesLicenses: There are wide variations among : There are wide variations among jurisdictions relative to information on jurisdictions relative to information on cancelled, suspended and revoked accounts. cancelled, suspended and revoked accounts. Some jurisdictions need to look to the quality Some jurisdictions need to look to the quality of the data they are reporting. Others may of the data they are reporting. Others may have policy questions to address. For have policy questions to address. For purposes of this analysis, “suspended” and purposes of this analysis, “suspended” and “revoked” have been combined.“revoked” have been combined.

Analyzing the Data con’tAnalyzing the Data con’t Cancelled AccountsCancelled Accounts: for 2004, the jurisdictions : for 2004, the jurisdictions

reported canceling 30,284 accounts (11%.) For reported canceling 30,284 accounts (11%.) For 2003, 24,198 accounts were canceled (9.3%). Two 2003, 24,198 accounts were canceled (9.3%). Two jurisdictions reported canceling accounts equal to jurisdictions reported canceling accounts equal to over eighty percent of their total accounts. (One over eighty percent of their total accounts. (One jurisdiction reported this for both years.) jurisdiction reported this for both years.)

Two jurisdictions reported canceling no accounts in Two jurisdictions reported canceling no accounts in 2004. One may have been a reporting anomaly. 2004. One may have been a reporting anomaly. The other reported no cancellations for both 2003 The other reported no cancellations for both 2003 and 2004. and 2004.

If the outlying jurisdictions are dropped, the If the outlying jurisdictions are dropped, the average percentage of canceled accounts is 8.8%. average percentage of canceled accounts is 8.8%. Median is 7.4%. There is wide variation reflecting Median is 7.4%. There is wide variation reflecting either differing policies, or a misunderstanding of either differing policies, or a misunderstanding of cancellation requirements.cancellation requirements.

Analyzing the Data con’tAnalyzing the Data con’t Suspended/Revoked AccountsSuspended/Revoked Accounts: For 2004, : For 2004,

the total number of suspended/revoked the total number of suspended/revoked accounts reported was 32,502 accounts reported was 32,502 (approximately 12%.) The median was (approximately 12%.) The median was 7.3%. For 2003, the total number was 30,277 7.3%. For 2003, the total number was 30,277 (approx. 12%.) The highest percentage was (approx. 12%.) The highest percentage was an unrealistic 84%. (The same jurisdiction an unrealistic 84%. (The same jurisdiction that has the high cancel count. A dope slap that has the high cancel count. A dope slap is in order.) Conversely, eight jurisdictions is in order.) Conversely, eight jurisdictions reported not suspending or revoking any reported not suspending or revoking any licensees for 2004, presumably because all licensees for 2004, presumably because all their taxpayers are perfect. their taxpayers are perfect.

Analyzing the Data con’tAnalyzing the Data con’t Canceled/Suspended/Revoked CombinedCanceled/Suspended/Revoked Combined: :

Well, maybe jurisdictions either cancel accounts Well, maybe jurisdictions either cancel accounts or suspend or revoke them, but not both. Turns or suspend or revoke them, but not both. Turns out not to be the case. For the most part, out not to be the case. For the most part, jurisdictions either do both, or they do neither. jurisdictions either do both, or they do neither. The average for 2004 was 21.7 percent of all The average for 2004 was 21.7 percent of all accounts being canceled, suspended or revoked. accounts being canceled, suspended or revoked. This ranged from an (unrealistic) high of 174% to This ranged from an (unrealistic) high of 174% to a low of 0.8%. The median was 16.2%. Fifteen a low of 0.8%. The median was 16.2%. Fifteen jurisdictions canceled, suspended, or revoked jurisdictions canceled, suspended, or revoked fewer than ten percent of their accounts. fewer than ten percent of their accounts.

Analyzing the Data con’tAnalyzing the Data con’t AuditsAudits: :

In 2004, the jurisdictions completed 8022 audits (3.0% of In 2004, the jurisdictions completed 8022 audits (3.0% of accounts.) In 2003, the jurisdictions did a little better – 8032 accounts.) In 2003, the jurisdictions did a little better – 8032 audits ( 3.1%.) In 2004, the highest percentage was 4.7%; audits ( 3.1%.) In 2004, the highest percentage was 4.7%; the lowest 0.8%. For 2003, it was 5.2% and 0.5% the lowest 0.8%. For 2003, it was 5.2% and 0.5% respectively.respectively.

The distribution of completed audits to accounts for 2004 was:The distribution of completed audits to accounts for 2004 was:

Percentage completedPercentage completed CountCount>4%>4% 4 43.5% to 4%3.5% to 4% 10103.0% to 3.4%3.0% to 3.4% 17172.5% to 2.9%2.5% to 2.9% 10102.0% to 2.4%2.0% to 2.4% 7 71.5% to 1.9%1.5% to 1.9% 8 8<1.5%<1.5% 2 2

Analyzing the Data con’tAnalyzing the Data con’t Audits with Assessments.Audits with Assessments.

Not sure what this proves other than jurisdictions on either extreme Not sure what this proves other than jurisdictions on either extreme may want to look at their policies. For 2004, four jurisdictions may want to look at their policies. For 2004, four jurisdictions assessed on 100 percent of their audits. One jurisdiction assessed assessed on 100 percent of their audits. One jurisdiction assessed on on none of its audits. The mean average was 73% and the none of its audits. The mean average was 73% and the median was median was 81%. 81%.

The distribution of the ratio of audit assessments to audits The distribution of the ratio of audit assessments to audits completed for 2004 is as follows:completed for 2004 is as follows:

Percentage rangePercentage range CountCount>90% to 100%>90% to 100% 1313>80% to 90%>80% to 90% 1717>70% to 80%>70% to 80% 7 7>60% to 70%>60% to 70% 6 6>50% to 60%>50% to 60% 9 9>40% to 50%>40% to 50% 2 2>30% to 40%>30% to 40% 1 1<25%<25% 3 3

SummarySummary There is wide variation in the information There is wide variation in the information

jurisdictions report on their annual reports. jurisdictions report on their annual reports. Jurisdictions probably need clearer instructions on Jurisdictions probably need clearer instructions on what and how to report. Jurisdictions should what and how to report. Jurisdictions should review their submissions for obviously unrealistic review their submissions for obviously unrealistic answers. Jurisdictions should be apprised of the answers. Jurisdictions should be apprised of the value of their information, and should be value of their information, and should be encouraged to make accurate reports. In some encouraged to make accurate reports. In some cases, jurisdictions should be encouraged to cases, jurisdictions should be encouraged to review their policies relative to cancellation, review their policies relative to cancellation, suspension, and revocation to encourage their suspension, and revocation to encourage their licensees to comply with IFTA requirements.licensees to comply with IFTA requirements.

Comments/Questions/Comments/Questions/SuggestionsSuggestions