Carbon Tax - How Is Your Business Handling This?

AccountsReceivable@DRC

Moderator
Staff member
20
Question out to members regarding the new 'carbon tax' - how are you handling this increase in terms of invoicing customers and payable processing?

Are you 'lumping' these charges into fuel and increasing your fuel surcharge to customers? Are you breaking out the carbon tax on invoices - making it a seperate distinct charge from your normal fuel surcharge amounts?

I'm not hearing much chatter on this new tax and how it should be handled from an AP and AR perspective.

Wondering how members are handling yet again...another wonderful government tax.
 

MikeJr

Moderator
Staff member
30
AB carriers have been adding Carbon tax for some time. We pay it and do not pass it on to our clients (it's marginal as it's small local moves in AB).

Keep well,
Mike
 

loaders

Site Supporter
30
The tax will impact the price of diesel fuel. If you have a fuel surcharge program in place, it will deal with the resulting increase in the price of fuel.. Seasonal and market fluctuations in crude prices will have a greater effect on the cost of diesel fuel than the new carbon tax.
 

bad_spellur

Member
2
With the exception of local support, all of our trucks fuel in the US. I'm sure there will be some that will charge additional to cross border shipments, however, we will not.
 

Michael Ludwig

Well-Known Member
20
@AccountsReceivable@DRC
My best guess is that it should be added as line item tax.
Since this is a new tax and nobody, including government, really knows how to deal with it, I would expect that at some point in time some genius accountant will figure out how freight payers can take advantage of the carbon tax they have paid thru other parties in lieu of direct government inputs.
This would be especially true of Canadian manufacturing. Consider that they very likely have to pay carbon tax on their manufacturing process(es), it would not be beyond expectation that they would be looking for whatever they can find in credits, one of which would be the carbon tax they have already paid carriers to move their manufactured goods.
It's going to be the GST/HST thing all over again !!!
The problem is going to be; How do you figure it out?
The most logical approach would be a replication of the IFTA filings with carbon taxes substituted in for fuel tax figures. However, it would have to be something that was done on-the-fly in concert with your billing/invoicing program. It will be hell on carriers that do not have TMS, although it could probably be managed through the ELD system(s).
As for us, we're eating it for the time being. When tech catches up we'll have a much better idea of how to deal with it.
 

loaders

Site Supporter
30
Why not just deal with it as we deal with all fuel price fluctuations, with the Fuel Surcharge? Why make it more complicated than it actually is? There have been tax changes to the price of fuel before and everyone seemed to work it out. Don’t get me wrong, I don’t like to have to pay more for anything, fuel, food, booze, anything, but let’s not turn this one increase into an accounting nightmare. If the price of fuel has gone up for any reason, employ your FSC to compensate.
 

Michael Ludwig

Well-Known Member
20
Mostly because it's not a fuel price increase. It's a carbon tax.
As with most taxes, when a business pays a tax on one side, they usually get a credit for it on the other side.
The other tax increases on fuel that you are referring to are excise-type taxes. Very few people, outside of indigenous peoples, fishermen, and farmers, get credits for those.
And you're too late ... it's already going to be an accounting nightmare :(
 

loaders

Site Supporter
30
Call it whatever you want but the only effect it has is to increase the cost at the pumps for fossil fuels namely diesel, gasoline, propane and natural gas. There is a rebate program in place for personal use but I have yet to hear about one for commercial users. Perhaps the credit offset you described could/will be used. My point is, if the price of fuel has increased, use your FSC.
 
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