Who needs an IFTA Account?
You operate a vehicle that transports people or property for compensation AND your vehicle has three or more axles OR has two axles and a registered gross vehicle weight of 26,000 pounds or more OR used in a combination that has a registered gross vehicle weight of 26,000 pounds or more.
If you are based in a member jurisdiction (the 48 contiguous States of the United States and the 10 Canadian Provinces are members of IFTA) and operate a qualified motor vehicle in 2 or more member jurisdictions. If you usually operate your vehicles only in one jurisdiction but make occasional trips outside the base jurisdiction, you may elect to purchase trip permits for that occasional travel. Permitting services can usually be contacted from any major truck stop.
IFTA, the International Fuel Tax Agreement, is an agreement made between the main 48 States and Canadian provinces to create the most efficient method of distributing fuel tax to jurisdictions based on road usage. IFTA tracks carriers that operate in more than one jurisdiction by assigning them an IFTA license and decals that must be displayed on each Qualified Motor Vehicle. The fuel tax is distributed among the states through the required Quarterly Filings.
You will need to register in your base state, where your primary business location is. The base jurisdiction will be processing the license application. If you qualify as an IFTA licensee, the base jurisdiction will send you an IFTA license which you will be required to copy and place in each of your qualified motor vehicles. The base jurisdiction will also send you two decals for each qualified motor vehicle that you have. Your base jurisdiction will also provide you with all the information you need to comply with the provisions of the IFTA, including the records you will be required to keep. The base jurisdiction will provide you with a tax return and all of the tax rates each quarter. The base jurisdiction will also process the quarterly tax returns and will contact you if there are any questions concerning the returns. The base jurisdiction may audit your records. It will audit your records on behalf of all member jurisdictions.
The IFTA License and decals need to be renewed every year to obtain the current year’s credentials.
Each state will require you to sign a Record Keeping Agreement, an agreement between the State and the Motor Carrier stating that the Motor Carrier will maintain and track all records in regard to IFTA for reporting and tax purposes. Each mile and gallon of fuel for the Qualified Motor Vehicles will need to be tracked and recorded per state. The easiest way to track this is going to be with your ELD device. Other options include a fuel card or paper logs. You must keep all fuel receipts for 4 years, as they will be necessary if your account is audited.
IFTA Filings require your mileage and fuel records by State to be filed on a quarterly basis. These filings are due by the end of the following month after a Quarter has ended. If a due date falls on a weekend (Saturday, Sunday, or Federal Holiday) it is due by the end of the following business day. EVEN IF THE TRUCK DID NOT OPERATE – YOU MUST FILE A RETURN.
Follow the following steps to calculate your IFTA Fuel Tax Report
- -> Track miles traveled in each member state or province.
- -> Record and calculate the total gallons of fuel purchased in each member state or province.
- -> Record and calculate fuel consumed in each member state or province.
- -> Record and calculate the fuel tax of each state or province.
- -> Add everything together.
Required Quarterly Filing Dates:
Quarter 1 Time Period Covering: January 1st – March 31st Filings Due By: April 30th
Quarter 2 Time Period Covering: April 1st – June 30th Filings Due By: July 31st
Quarter 3 Time Period Covering: July 1st – September 30th Filings Due By: October 31st
Quarter 4 Time Period Covering: October 1st – December 31st Filings Due By: January 31st