Fourteen Ways to Minimize Fleet Tax Liabilities

The March 2016 issue Fleet Financials examined various ways fleets could minimize their tax liability in an article titled “14 Ways to Minimize Fleet Tax Liabilities.” The publication found that one of the key concerns about fleet taxation revolve around inconsistency of vehicle taxation due to varying state tax regulations. Some states will tax the lease stream and some will tax the purchase of the vehicle for lease up front, while others will continue the hybrid treatment of taxing multiple payments up front.

Additionally, many jurisdictions have opted to generate new revenues through motor vehicle-related taxes, such as higher vehicle registration/license plate fees, emissions inspection fees, additional taxes on tires and batteries, and new environmental fees/surcharges for tire disposal and oil recycling.

ARI’s controller, Bryan Wilson, emphasized that this kind of complexity requires that each fleet develop their own strategy. “It is hard to recommend any single strategy because there are so many different variables. We recommend that each client creates a long-term, comprehensive tax strategy that is developed together with advice from competent professionals and takes into account the client’s industry among other factors. Further, once that is in place, they should constantly monitor the tax environment and the economy in general and adjust their planning accordingly if any changes occur.”

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