Discover Easy IFTA with TruckingOffice
At TruckingOffice we make it easy to stay on top of your quarterly IFTA filings by keeping all of your information organized in one place. After you get your IFTA stickers and IFTA permit staying organized is the key to keeping up with your reports. With TruckingOffice, all of your miles are calculated using PC*Miler, so all you have to do is enter in your trips and TruckingOffice will calculate all miles driven and report them back to you by state. PC*Miler is completely integrated making it very easy to use. TruckingOffice provides a comprehensive IFTA quarterly fuel tax report that displays all of your IFTA miles per state (empty, loaded, and toll) and all of your fuel gallons by state/province making your IFTA forms easy to fill out. Get Started today and discover just how easy it really is.
What is IFTA?
The international fuel tax agreement more commonly know as IFTA, is an organization that covers both the United States and Canada. This agreement was established to simplify the reporting of fuel use by motor carriers, which operate in more than one jurisdiction. All you have to do is apply for your IFTA permit and they will send the IFTA stickers to put on your truck.
How IFTA Works to Help Drivers
Before IFTA, the fuel tax reporting system was burdensome and costly. Each state had its own system for issuing permits and enforcing tax collection. Trucks involved in interstate commerce were required to carry special plates known as “Bingo plates” that displayed each state’s permit sticker. Today’s system is known as a “pay now or pay later” system. Here’s how it works:
- When commercial motor vehicles buy fuel, the taxes paid are credited to the licensee’s account.
- At the end of the fiscal quarter, the licensee files their fuel tax report listing miles traveled and gallons purchased.
- To determine the tax liability, the average fuel mileage is applied to miles traveled in each jurisdiction.
- In New York, Kentucky, and New Mexico, “weight-mile” taxes apply in addition to the standard taxes.
- The amount of fuel taxes (or refund) due are paid to the jurisdiction that issued the license.
- Member jurisdictions then transfer the funds accordingly.
- Fuel tax audits are performed by the base jurisdiction.
Many drivers question the IFTA and wonder if it is always fair. The fact is, the IFTA was created to be more convenient for drivers. In the past, filing was confusing because tax rates vary from state to state. But, by issuing one fuel tax license that applies to any state you drive in, the IFTA is a more efficient way of dispersing the taxes.
How Do I Know if I Qualify?
You qualify for an IFTA license if you operate your qualified motor vehicle in U.S. state or Canadian province that is a member of the International Fuel Tax Agreement. To qualify, your vehicle must meet the following weight requirements:
A vehicle used or designed to transport people or property is a qualified motor vehicle if it:
- Has three or more axles; or
- Has two axles and a gross vehicle or registered gross vehicle weight of more than 26,000 pounds or 11,797 kilograms; or
- Is used in a combination that has a combined or registered gross vehicle weight of more than 26,000 pounds or 11,797 kilograms.
A recreational vehicle such as a motor home or a pickup with a camper is not considered a qualified motor vehicle when an individual uses it exclusively for personal pleasure. Vehicles used in connection with a business operation are not considered recreational.
What Documentation is Required for Filing IFTA Reports?
Each carrier is required to keep all receipts, either hard copy or electronic. The fuel tax payments must be submitted four times a year (each quarter) to the state where the business is based. If overpayments occurred, a refund is due. If the taxes were underpaid, the difference is due. In addition to all receipts for fuel purchases, drivers must keep trip reports for miles traveled in each state. Also, their IFTA license number and IFTA permit numbers are required. Log books cannot be used in place of trip reports because they only document hours of service.
IFTA Rules That Must be Followed
Once approved for an IFTA license, there are some primary rules that apply:
- License and decals expire on December 31st. Be sure to renew on time.
- An extension for IFTA license renewal can be obtained if you apply on time and your account is in good standing. The extension gives you until March 1 to display the current year’s decal on your vehicle.
- Stickers should be displayed on both sides of your vehicle cab.
- Pay IFTA taxes on time to avoid penalties or loss of IFTA license.
- Keep a copy of your IFTA license in the cab at all times.
- Replace lost IFTA stickers and IFTA permits immediately.
The IFTA rules and requirements can be complicated, but it is much easier than the hassle of complying with individual state standards.
When Are IFTA Taxes Due?
IFTA reports should be filed every quarter. Here is a breakdown of the quarters and when the taxes are due:
January – March
April – June
July – September
October – December
What is the Penalty for a Late Filing?
A penalty of $50.00 or 10% of the net tax liability, whichever is greater, will be assessed on late-filed reports, failure to file, or for underpayment of tax due. If the net tax liability is zero or a credit, the late filing penalty will still be $50.00. Interest rate at 1 % per month is assessed on all delinquent taxes due each jurisdiction.
What About Exemptions?
Some states allow exemptions depending on where you drove or bought fuel. For instance, areas such as private roads, some toll roads, or Indian reservations qualify for an exemption. Also, if you drove on the Massachusetts Turnpike, an additional refund can be claimed by entering those miles as “non-IFTA” miles on the IFTA form. However, you must file an ST-10 annually and keep all toll receipts.
Here are a few more examples of fuel tax exemptions that might apply in certain cases:
- Type of Fuel: specific types of fuel are exempt in some states.
- Permits: some temporary trip permits include the fuel tax.
- Vehicle: exemptions are allowed in some states for specific vehicle types.
These miles are referred to as non-IFTA miles, but you must still report them as miles driven because they affect your vehicle’s mpg efficiency calculation. If these miles fit the criteria for that quarter in that jurisdiction, you will not have to pay taxes on those miles. You can refer to the IFTA Exemptions Table here for more information.
Why You Should Register for IFTA
IFTA was created to simplify the process of paying fuel taxes. The license authorizes you to travel in all IFTA member jurisdictions. Also, a single tax return fulfills your reporting requirements. Although the process was intended to be easier than previous reporting methods, it can be complex at times. If you would like more information about IFTA, contact us at Trucking Office. We will be happy to answer your questions. You’ll learn how we can help with your IFTA fuel reporting responsibilities, cut down on your paperwork, keep you organized, and increase profits. We invite you to visit our website or give us a call today.