The term IFTA is short for International Fuel Tax Agreement, which represents a tax collection agreement among the 48 contiguous United States and its 10 bordering Canadian Provinces. IFTA Returns are filed on a quarterly basis for qualified highway motor vehicles that operate in at least 2 out of the 58 total jurisdictions.
Who Must File IFTA?
Any vehicle is considered to be a qualified motor vehicle if it is used, designed, or maintained for the purpose of transportation of persons or property and has a registered gross vehicle weight of more than 26,000 pounds. Also, any vehicle with 3 axles or more is considered to be a qualified motor vehicle regardless of weight. Finally, if the combined weight of all of its parts is greater than 26,000 pounds, it is also considered to be a qualified motor vehicle.
How Does IFTA Work?
The state or province in which the vehicle is registered is considered to be its Base Jurisdiction. IFTA must be filed with the vehicle’s respective jurisdiction each quarter. Each state or province has a different rate and those rates can change each quarter. Every driver must keep a trip log of how many miles are traveled in each state or province, as well as how much fuel was purchased in each state or province.
The Purpose of IFTA
According to the International Fuel Tax Agreement, its purpose is “to promote and encourage the fullest and most efficient possible use of the highway system by making uniform the administration of motor fuels use taxation laws with respect to qualified member vehicles operated in multiple member jurisdictions.” When an IFTA form is filed with its appropriate jurisdiction, The Fuel Tax Report is then used to determine the tax amount due as well as the refund due. It is also used for redistributing collections from the jurisdictions that received IFTA payments, and the jurisdictions that deserved some.
One of the reasons for the Fuel Tax is to ensure that a vehicle pays taxes to all deserving jurisdictions. For Example: if a vehicle travels through a state, but buys no gas while in that state, then there was no fuel tax paid to that state through the purchase of gasoline. Part of their tax would then be redistributed to the state that received no fuel tax through the purchase of gasoline.
Since the data required filing IFTA is so incredibly detailed, many people receive Audits of their IFTA information. The sadness of this is that this can be prevented by better record keeping. ExpressIFTA, along with providing a terrific service for other Fuel Tax needs, will perform an internal audit of your IFTA information for you. In this internal audit performed by Express IFTA Tax, it will check for basic mistakes and discrepancies, as well as perform a state adjacency check and an abnormal MPG audit. They also provide online trip sheets for drivers to keep accurate records that can be accessed from any computer, anywhere! If you can prevent an audit due to simple mistakes on an IFTA return, it makes no sense not to let Express IFTA help you get it right the first time.
To find out more about IFTA filing or get started today, contact our friendly Express Tax Support Center in Rock Hill, SC at 704.234.6005 between the hours of 8am – 6pm EST, Monday through Friday or email us at support@ExpressIFTA.com. We have Spanish Support too!
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