Taxes Menu

If someone were to ask me to pick one feature that has kept StoreReport a highly effective system for over 19 years, I would have to point to our tax system. Most software designers, when introduced to the complicated taxing requirements of the fuel oil business, find it too intimidating and quit before they really understand it.

It took the first six years in business for me to develop all the complicated tax tables to support the different kinds of taxes that oil marketing companies must face in all fifty states. From sales tax on county road tax to diesel farm tax, to Mississippi sales tax to the "Hawaiian Gallon" - I've seen them all. I doubt seriously that there is any other more complicated taxing system on the face of the earth. Our policy is that if we ever meet a taxing system we don't already know, we can't wait to bring it under control, so that our system can handle it. Handling the taxes in one state is one thing, but the ability of a system to automatically handle taxes on products that cross state lines in these complicated taxing situations is no small feat.

We have designed a tax system that not only supports every tax known to this business, but it is table driven - that means you can modify the tax rates without having to call in a programmer.

Once in 1984, I talked to an oil marketer in a state I was not familiar with. When I asked him to give me a run down on his fuel taxes, he said "Oh we've got all the taxes here - federal and state." At the time I was working with an oil company that could have as many as 18 different taxes on a single gallon of gasoline - I couldn't help but laugh.

In talking about our fuel tax system, I like to include the following table as a reference:

Purchases:

 If the taxes are based on gallons purchased and the tax is prepaid to the supplier, the computer debits prepaid taxes and credits the supplier.

If taxes are based on gallons purchased and we do not prepay the supplier, the computer debits the prepaid taxes and credits the tax liability.

If taxes are based on gallons sold, no action is taken.

Sales:

If taxes are based on gallons purchased and the customer pays the tax, the computer credits prepaid taxes and debits the customer.

If taxes are based on gallons purchased and the customer does not pay the tax, the computer credits the prepaid taxes and debits exempt taxes. Also an entry is made for the exempt tax reports.

If taxes are based on sales and the customer pays the taxes, the computer credits the tax liability and debits the customer.

If taxes are based on sales and the customer does not pay the taxes, the computer simply makes an entry for the exempt tax reports.

Adjustments:

If taxes are based upon gallons purchased or dropped, the computer debits or credits the prepaid taxes and writes the taxes off to expense or income.

If taxes are based upon gallons sold, no action is taken.

Drops:

If taxes are based on gallons dropped, the computer debits the prepaid taxes and credits a tax liability.

Transfers:

If taxes are based upon gallons purchased in either state involved in the transfer, the taxes are reversed in one state and reapplied in the other.

In addition to other things, the system will extract percentage sales taxes from pump prices whether or not that tax is applied on gallons, or gallons and taxes. For example, sales taxes may be on the fuel product itself, and on state and county road tax, but not federal and city road taxes. Sales taxes can be based on point of sale or point of deliver, etc.

So as you browse through the tax menu, keep in mind that the bulk of the complicated taxing issues are transparent to the user.