IFTA
The International Fuel Tax Agreement (IFTA) is an arrangement among U.S. states and Canadian provinces. Taxes are paid on motor fuels, and IFTA allows commercial motor carriers to register in one state and have these tax assessments paid out to all participating areas according to their fair share.
To fully understand what IFTA is, it’s important to know why the agreement was made in the first place.
Prior to the IFTA program, drivers had to obtain a permit for every state or province they crossed, available at a designated port of entry. Acquiring a number of permits and maintaining the quarterly filings added a significant amount of extra effort related to interstate truck trips.
IFTA has established uniformity and efficiency in fuel tax payments among member states. According to estimates, IFTA saves trucking businesses millions of dollars annually in administrative costs.
IFTA was created for truckers who frequently cross state lines on their routes. It simplifies accounting and payment of fuel taxes and relieves trucking companies of some paperwork.
Fuel taxes are assessed in each state or province and paid at the time of purchase. Commercial trucking operations hold permits that dictate a specified tax rate on motor fuel, and their payouts are recorded so that the taxable total can be calculated and adjusted (money owed or money credited) on a quarterly basis.
Carriers need an IFTA license if they’re based in a member state and operate across two or more member jurisdictions. Another consideration is the type of vehicle they use.
IFTA defines a “qualified motor vehicle” as a vehicle built and used to transport property or people. Qualified motor vehicles must also fit any of the following descriptions:
Any vehicle with two axles and a gross vehicle weight of over 11,797 kilograms or 26,000 pounds
A vehicle of any weight but with three or more axles
A vehicle that exceeds 11,797 kilograms or 26,000 pound
Fuel taxes are assessed in each state or province and paid at the time of purchase. Commercial trucking operations hold permits that dictate a specified tax rate on motor fuel, and their payouts are recorded so that the taxable total can be calculated and adjusted (money owed or money credited) on a quarterly basis.
IFTA quarters
Below is a list of the IFTA return due dates for each reporting quarter:
1st quarter (January to March) — April 30
2nd quarter (April to June) — July 31
3rd quarter (July to September) — October 31
4th quarter (October to December) — January 31
Late payment fees will be incurred if you pay after the IFTA quarters deadlines.
If you need an IFTA license, the first step is to fill out the application form used in your base state.
IFTA application forms may vary and can sometimes serve other purposes. Carriers based in Ohio, for example, can use the IFTA application form to request additional decals or make changes to their account.
Some of the basic carrier information required for new IFTA applications are:
Registered business name
Mailing address
Federal business number
USDOT number
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