Years ago, every state had its own regulations and mandates regarding ifta fuel tax report requirements, but most have now become members of the IFTA. An acronym for the International Fuel Tax Agreement, the system works to standardize many of the varied and (occasionally) contradicting rules that many states used to create. Some may retain additional requirements for their fuel tax reporting, but the process has become a lot simpler now that many have adopted this more universal standard.
- Registering a base state. Because most trucking companies operate all over the country, or at least across a wide region, it can be difficult to know in which (or even in how many) states to register as a base. The IFTA does not set absolute standards for these, so you will need to contact the local register if you have a place of business in a state, maintain mileage records, and/or register your vehicles there.
- Qualified vehicles and fuels. Here the IFTA is a little more specific with its fuel tax reporting requirements. To be qualified, a motor vehicle must travel in at least two IFTA jurisdictions, and: must weigh over 26,000 pounds, or have three or more axles on the power unit, or (less applicably to truck companies) be a bus that can carry at least 20 passengers. To be licensed for tax reporting, these vehicles must use diesel, propane, or natural gas—though some jurisdictions will require even gas-powered vehicles to be licensed.
- Applications. Every vehicle belonging to a carrier must apply for an annual license—which is validated with two decals (to be placed on either door). You must contact your local department of motor vehicles for an application for a new vehicle, but the IFTA will send renewal applications automatically for the following years. Once approved, every qualified vehicle must carry a copy of the distributed licenses.
- Fuel tax reporting. A fuel tax report must be submitted four times a year that covers all of a carrier’s qualified vehicles. Scheduled in quarters on the calendar year, a check must accompany each report to cover any tax payment due—usually made payable to the base state’s Secretary of State. Reports will reveal that you have accumulated a tax credit from tax-paid fuel. If this number exceeds whatever you owe, a refund or additional credit to cover future payments will be given.
- Receipts. In order to receive those refunds or tax credits, receipt information from tax-paid purchases must also accompany each quarterly fuel tax report. These receipts must include: the date of purchase, fuel type, seller’s name and address, purchaser’s name, vehicle registration number, total amount of sale, and number of gallons purchased.
- Records. In addition to keeping up with fuel tax reporting, all registered carriers must maintain records of individual vehicle mileage reports—to be summarized monthly—as well as information of all fuel bought at service stations.
These ifta fuel tax report requirements are specific and can be at times aggravating, but compared to the hassle of complying with multiple states’ standards, the universality of IFTA’s regulations is a welcome thing. For more information on IFTA software for trucking, check us out!
You can also find more IFTA information in our IFTA Resource Center including a directory to your home state’s IFTA office.