All you need to know about IFTA
What is IFTA?
IFTA or International Fuel Tax Agreement is an agreement between 48 American states and 10 Canadian provinces that makes it easier for transport companies traveling through different states/provinces to report and pay their IFTA fuel taxes.
Alaska, Hawaii, and the Canadian territories are not part of the agreement.
IFTA’s main purpose is to simplify the process and reduce the paperwork involved for fuel tax reporting. After registering, you will receive a license with two decals for each commercial motor vehicle (CMV) you operate.
What are the Advantages of IFTA?
IFTA advantages for transport companies:
- One annual fuel tax licence authorizing the vehicle to travel to all IFTA jurisdictions.
- File a single quarterly tax return with your base jurisdiction. This tax return will cover your operations/travel to jurisdictions.
- Base jurisdiction conducts comprehensive audits on behalf of other jurisdictions.
How is IFTA different than IRP?
IRP, or International Registration Plan, follows the same premise as IFTA but with licence plates. Under IRP, a carrier is issued one set of license plates (prorate plates) and one cab card for each CMV. Like IFTA, IRP consolidates licensing and reporting requirements through the base state/province.
Who must register to IFTA?
Register for IFTA, you meet the following requirements:
- Truck has two axles and a gross vehicle weight (GVW) exceeding 26,000 pounds or has three or more axles.
- Transport goods or people across different states/provinces.
- Truck with a trailer and their combined weight exceeds 26,000 pounds.
IFTA rules to follow?
IFTA rules to follow in order to avoid fines and keep your IFTA license in good standing:
- Display the IFTA decals on both sides of your truck cab.
- Renew your IFTA license and decals on time.
- IFTA license and decals are valid for one year from January 1st to December 31st.
- All registered trucks require a photocopy of your IFTA license at all times. (in cab)
- File your IFTA tax return and pay any fuel taxes due on time.
IFTA tax reports due date?
|IFTA tax reporting is done each quarter.||IFTA tax reporting periods and their corresponding due dates.|
|January to March Q1||Report due April 30|
|April to June Q2||Report due July 31|
|July to September Q3||Report due October 31|
|October to December Q4||Report due January 31|
IFTA (GPS data )?
- GPS data collection requirements , on-board recording devices, vehicle tracking systems, or other electronic data recording.
Minimum for all recorded data points :
- Latitude Longitude Date/time
- Method used for distance calculations
- Odometer readings
- Method used to calculate distances
Why use a service provider (Services PL) to perform your IFTA fuel tax reporting?
Subcontracting to Services PL will save your organization time and money, reduce your long term risks, eliminate the headaches associated with managing IFTA fuel and mileage tax reporting.
Services PL is a reputable , respected and professional IFTA service provider.
Where can I travel using IFTA credentials?
Most Canadian provinces and US states are IFTA members.
The jurisdictions listed below are not IFTA members and IFTA credentials are not valid for travel there:
- United States: Alaska, Hawaii and the District of Columbia
- Canada: Northwest Territories, Nunuvit and Yukon Territory
- Mexico: All states and the Federal District
Are there penalties for traveling without valid IFTA credentials or a fuel trip permit?
Do I file a quarterly fuel tax return if I didn't run during the quarter?
Yes, you must submit a "zero" return even if no taxable fuel was used.
When are audits performed?
The base jurisdiction will conduct audits for itself and all member jurisdictions
Jurisdictions must complete audits on an average of 3% of its licensees each year
Of the 3%, 25% of the audits must involve high-distance accounts
Of the 3%, 15% of the audits must involve low-distance accounts
Audit monies are transmitted with the monthly transmittal reports; audit reports are sent upon completion
How do I obtain a return?
Your base jurisdiction will mail a return to your mailing address at the close of each reporting period.
How long must records be kept?
Records upon which the quarterly tax return is based must be preserved for four (4) years from the tax return due date or filing date, whichever is later, plus any time period included as a result of waivers or jeopardy assessments.
What is the difference between IRP and IFTA?
The difference is:
- IRP is a cooperative agreement for registering vehicles that travel into two (2) or more jurisdictions.
- IFTA (International Fuel Tax Agreement) is an agreement between member jurisdictions for the uniform collection and distribution of fuel tax revenues.
Distance report for the State of New York (NY HUT)
Fuel Tax System has all the functionality required to produce the HUT tax report on the distance traveled in the State of New York (Highway Use Tax). Using the data input for your IFTA reports, Fuel Tax System prepares your declaration for the state of New York in full compliance and without problems. You print it, you sign it and it's done!
What is the NY HUT?
The NY HUT or "New York Highway use tax" is a tax levied by the State of New York for miles traveled in its territory. Two conditions apply: if the weight of your vehicle exceeds 18,000 lbs and you drive on New York State roads, you must file a tax return on a quarterly basis and pay the amounts due.
Obtaining a permit is mandatory. Your permit number is also required to prepare your return in the Fuel Tax System.
Distance Report for the State of Kentucky (KYU)
Fuel Tax System allows you to easily produce your quarterly tax reports on distances travelled in the state of Kentucky. Using the same functionality required for IFTA reporting, Fuel Tax System accumulates millage traveled and produces your returns to the standards required by the state of Kentucky.
What is the KYU?
The KYU or "KYU number" is a permit that is required if the weight of your vehicle exceeds 60,000 lbs and you are traveling in the state of Kentucky.
Kentucky, like the state of New York, New Mexico and Oregon, requires the production of a declaration of tax on the distances traveled by your vehicles on its territory every quarter.
Fuel Tax System meets the reporting requirements for Kentucky. Simply have your permit number (KYU number) to prepare and print your reports without difficulty.
Distance Report for the State of New Mexico (Weight Distance)
Fuel Tax System offers you all the functionality required to produce your tax report on the distances traveled in the state of New Mexico.
Using the same mileage data as the IFTA reports, Fuel Tax System produces your returns to the standards required by the state of New Mexico.
If the weight of your vehicle exceeds 26,000 lbs. And you drive on New Mexico roads, you must file your tax returns on a quarterly basis, even if your report shows zero mileage.
New Mexico, as well as the state of New York, Kentucky and Oregon, requires the production of a tax declaration, quarterly, on the distances traveled by your vehicles on its territory.
Distance Report for the State of Oregon (Oregon Highway-use tax)
Fuel Tax System allows you to easily prepare your quarterly tax returns on distances travelled in the state of Oregon. Using the same input data for IFTA reports, Fuel Tax System accumulates mileage traveled and produces your returns to the standards required by the state of Oregon.
What is Oregon highway-use tax?
The Oregon Highway-use tax is a tax that any carrier that travels on Oregon highways and whose vehicle weight exceeds 26,000 lbs is required to pay.
An Oregon Weight Receipt is required for each vehicle traveling in Oregon and must be kept in the vehicle.
Oregon, unlike the state of New York, New Mexico and Kentucky, requires the production of a declaration of tax on the distances traveled by your vehicles on its territory every month for the first year.
Subsequently, reports are due quarterly, even if you have not traveled in Oregon during the quarter.
Fuel Tax System meets reporting requirements for Oregon. Simply have your tax number and permit number to prepare and print your reports without difficulty.