IFTA Annual Report Database Presentation

1. IFTA Annual Report Database Presentation IFTA Annual Business Meeting July 2005 Halifax, Nova Scotia Presented by Garry Hinkley IFTA Board of Trustees

2. The Requirements con’t • P1100 Base Jurisdiction Reporting P1100 Annual Reporting .100 Reporting Requirement All jurisdictions which are members under this Agreement shall submit an annual report by March 1 for the preceding calendar year to the repository for distribution to each member jurisdiction.

3. The Requirements con’t .200 Reporting Period The report shall be for the period beginning with the date of membership through December 31 and for each calendar year thereafter.

4. The Requirements con’t .300 Required Information Content of the annual report to member jurisdictions shall include: .005 Number of IFTA accounts which shall consist of all licensees that are issued an IFTA license and decals for a licensing year excluding licensees who were issued credentials in error and returned those credentials to the base jurisdiction; .010 Number of cancellations and suspensions/revocations; .015 Number of audits; .020 Number of audits with assessment; .025 Current tax rates; and .030 Unusual activities within a member jurisdiction that could affect an audit.

5. The Requirements con’t • P1120 TAX RATE REPORTING .100 Reporting Requirement Member jurisdictions are required to notify the repository at the earliest possible time of a change in their tax rate. The repository will then immediately notify each member jurisdiction. .200 Distribution of Tax Rate and Conversion Information The repository will disseminate to the member jurisdictions the U.S. and Canadian tax rates converted in accordance with the procedures specified in the IFTA Procedures Manual. The repository will also provide an information table that will include the converted tax rates and measurements for miles/kilometers and gallons/liters. The repository shall provide the tax rates and conversion information to all member jurisdictions by the first Monday of each quarter. .300 Failure to Report Tax Rate Changes 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 return for which the change is effective, the other jurisdictions will be relieved from taking extraordinary measures to implement the change. The jurisdictions that failed to provide adequate notification may, however, collect any additional taxes due directly from the licensees in the other jurisdictions.

6. The Requirements con’t • P1130 Reporting of Other Information Every member jurisdiction shall advise the repository of all changes regarding tax-exempt miles/kilometers, non-taxable fuels, tax-exempt vehicles, or any other changes affecting the administration of the Agreement.

7. Analyzing the Data • Total Number of IFTA Accounts Reported: • For 2004, the membership reported a total of 271,146 IFTA accounts. This is up from 257,875 for 2003. This is an increase of five percent. • For 2004, the five largest jurisdictions reported a total of 62,731 accounts, and the five smallest reported a total of 2,943. The mean average number of accounts per jurisdiction was 4,675 (4,446 for 2003), and the median was 3,845 (4,215 for 2003).

8. Analyzing the Data con’t • Decals Issued: For the 2004 license year, the jurisdictions reported issuing 2,948,142 decals. This compares to over 4.1M reported for 2003. (almost the entire reduction came from one jurisdiction. It is possible this jurisdiction previously was reporting a “set” as two decals, or had some other anomaly.) The average number of decals per licensee was 10.9. One jurisdiction reported an average of 60 decals per licensee. (Yes, the same jurisdiction as above, reporting the most decals issued.) The lowest average was 3.2 decals per licensee. Note: decals should be counted as a set=1. The count should be for the license year.

10. Analyzing the Data con’t • Decal fees: There is wide variation among jurisdictions in the fee charged for decals. The average fee was $3.90. In general, jurisdictions charging the least seemed to issue the most decals per account. Fee Range # of Jurisdictions Average # of decals/acct >$20 3 5.4 >$10 to $20 0 -- >$5 to $10 11 6.2 >$0 to $5 24 10.8 no fee 20 14.0 NOTE: Not adjusted for exchange rate. Jurisdictions charging little or no fee for decals should pay particular attention that licensees are not acquiring more decals than they need; and that decals are not being misused. Serializing decals and passing decal serial information to the Clearinghouse could help with this problem

12. Analyzing the Data con’t • Cancelled, Suspended, and Revoked Licenses: There are wide variations among jurisdictions relative to information on cancelled, suspended and revoked accounts. Some jurisdictions need to look to the quality of the data they are reporting. Others may have policy questions to address. For purposes of this analysis, “suspended” and “revoked” have been combined.

13. Analyzing the Data con’t • Cancelled Accounts: for 2004, the jurisdictions reported canceling 30,284 accounts (11%.) For 2003, 24,198 accounts were canceled (9.3%). Two jurisdictions reported canceling accounts equal to over eighty percent of their total accounts. (One jurisdiction reported this for both years.) • Two jurisdictions reported canceling no accounts in 2004. One may have been a reporting anomaly. The other reported no cancellations for both 2003 and 2004. • If the outlying jurisdictions are dropped, the average percentage of canceled accounts is 8.8%. Median is 7.4%. There is wide variation reflecting either differing policies, or a misunderstanding of cancellation requirements.

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

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

18. Analyzing the Data con’t • Audits: In 2004, the jurisdictions completed 8022 audits (3.0% of accounts.) In 2003, the jurisdictions did a little better – 8032 audits ( 3.1%.) In 2004, the highest percentage was 4.7%; the lowest 0.8%. For 2003, it was 5.2% and 0.5% respectively. The distribution of completed audits to accounts for 2004 was: Percentage completed Count >4% 4 3.5% to 4% 10 3.0% to 3.4% 17 2.5% to 2.9% 10 2.0% to 2.4% 7 1.5% to 1.9% 8 <1.5% 2

20. Analyzing the Data con’t • Audits with Assessments. Not sure what this proves other than jurisdictions on either extreme may want to look at their policies. For 2004, four jurisdictions assessed on 100 percent of their audits. One jurisdiction assessed on none of its audits. The mean average was 73% and the median was 81%. The distribution of the ratio of audit assessments to audits completed for 2004 is as follows: Percentage range Count >90% to 100% 13 >80% to 90% 17 >70% to 80% 7 >60% to 70% 6 >50% to 60% 9 >40% to 50% 2 >30% to 40% 1 <25% 3

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

24. Comments/Questions/Suggestions