I recently attended two separate tax conferences- both of which were heavily attended by state excise tax auditors. At the first conference, I was listening during lunch one day to the auditors’ conversations with each other about a common statistic they all shared. Every single one of them agreed that audit results broke down in the following buckets: 50% of companies filed properly and paid taxes properly; 25% of them underpaid taxes and 25% actually overpaid taxes. At the second conference, I actually asked the group of auditors I was meeting with what they thought the break down in categories was and I received the exact same answer. If half of all excise tax compliance filings are wrong, and half are right, what causes that? So, I asked the auditors if they saw a pattern. The answer was yes: the more manual an operation the tax calculation was, the more often it fell in the half that was filing wrong. The auditors said the manual processes are prone to error, and impossible to fix 100% of the time. Automated processes can detect and then resolve issues and the “fix” will prevent them from happening again.

So if your company files excise tax returns - you need to ask yourself two simple questions.

1. Which half are we in?

2. Is our process automated or mainly manual?

The answer to the second questions will most likely answer your first question!

Of note in the August 27th edition of the ATA’s The State Laws Newsletter: IL Goes After Fuel Tax Evaders – Last fall, the Illinois Department of Revenue and Attorney General’s Office ran a program for gasoline retailers who might have been underreporting their fuel and sales tax liability for them to file amended tax returns and pay what they owed. At that time, 66 retailers filed voluntarily and paid the state over $10 million in back taxes. Some of the cases were extreme, however, and the attorney general has now issued six indictments for tax fraud and evasion. More are evidently on the way. So far, those indicted are all from the Chicago and Peoria areas. The reports do not indicate that any of the service stations involved are truck stops, per se.

A lot has transpired since my last blog posting; the BP well has been capped in the Gulf, the Baltimore Orioles have a new manager and have actually won a few games (thankfully the Ravens season has started), and, for now, the death of cap and trade.

But one very interesting battle that has generally gone un-noticed is the defiant stance taken by the Texas Committee on Environmental Quality (TCEQ) and the state of Texas concerning unprecedented encroachment by the U.S. Environmental Protection Agency into the issuance of greenhouse gas permits in the state under new rules recently imposed by the EPA. In an open letter to EPA administrators Lisa Jackson and Alfredo Armendariz, Texas Commission on Environmental Quality Chairman Bryan Shaw and Texas Attorney General Greg Abbott stated the following, "In order to deter challenges to your plan for centralized control of industrial development through the issuance of permits for greenhouse gases, you have called upon each state to declare its allegiance to the Environmental Protection Agency's recently enacted greenhouse gas regulations -- regulations that are plainly contrary to United States law”. Wow, heady stuff.

Much has been written about the current administration’s attempts to federalize areas like health care that heretofore have been within the states' domain. And, from a business owner’s point of view, you definitely start getting the feeling that we’re headed toward a patronizing, “we know better than you” centralization of power.

But, does a central political apparatus really know what’s better for local business? As a staunch advocate for R&D investment in clean energy, I was dismayed by the recent decision to “borrow” $1.5 billion from a U.S. Department of Energy Department renewable-energy loan program to help pay for emergency education and Medicaid aid for states. The rationale was that the money wasn’t being allocated fast enough due to governmental bureaucracy. Instead of streamlining the process, we’ll just take the money. Huh? Only Voltaire’s Pangloss could put a positive spin on that logic.

Personally, I fear the centralization of power in a free market democracy because, fundamentally, its ability to execute will never be as good as a centrally planned and governed economy. Juxtapose this example, the Chinese government mandating the closure of 2,000 energy inefficient manufacturing plants by September 30th with the current TCEQ vs. EPA fight. How much time and how many millions of dollars will be spent to resolve the permitting issue? I am certainly not advocating more central planning; quite the contrary. I am most worried about the U.S. stagnating somewhere in the middle with an increasingly burdensome and costly central structure disrupting the normal flow of markets and the ability of businesses to execute.

Just food for thought. I’d love to hear your opinions.

As always, feedback welcome.

Matt

Recently, Mike Antich with Business Fleet blogged about the lack of succession planning for the fleet management role in the fleet industry. As he writes, “The majority of fleet managers are primarily Baby Boomers with few younger fleet managers… Today's fleet managers comprise a narrow demographic band and in the next 10-15 years, most will retire.” Is this true for your business? Does your organization have a succession plan?

Fleet management is a skill that combines exceptional short and long term planning, experience with supply chain management and logistics, human resources, as well as safety and regulatory compliance and customer service. With a majority of fleet managers (if Antich is right, which I believe he is) due to retire, it is critical for companies to recognize the importance of their role, contributions and education. In a sputtering economy, many fleet businesses are focused on truck utilization and survival. It can be difficult in this environment to plan for 10 to 15 years from now. Elevating the role of the fleet manager may prove difficult – but it can be done with strong contribution to operational performance.

One way some fleet managers have chosen to provide additive value is to take on even more responsibilities, even having more than one title. While this may provide short term job security, the reality is that fleet management is a full-time, complicated role. Fleet managers already wear more than one hat. The definition of the job is to be able to collaborate, partner, multi-task – and deliver.

Another way to elevate the fleet manager role is to demonstrate like-minded leadership. Focus on gaining expertise and meeting the corporate goals of top line reduction. Look for opportunities to reduce costs and streamline operations. Many of the fleet manager responsibilities are best kept in-house. Fuel management, however, may be a candidate for outsourcing and provide tangential value.

Partnering with the right company can allow fleet managers to focus on core competencies while providing continuity to a key component of fleet management. Saving money by utilizing fuel experts supported with the right tools and information can optimize fuel inventories and reduce costs. Demonstrating that you can reduce top line costs while managing millions of dollars of assets can only ensure success.

From what I’ve seen, whether lauded or not, the fleet manager position is here to stay – and more strategic to the business than ever. Fleet managers will continue to be a vital component of logistics and operations – whether they elect to keep fuel management in-house or outsource.