The Basics To Understanding IFTA

What is IFTA? 

• The International Fuel Tax Agreement 
• A tax collection agreement by and among the 48 contiguous States and the 10 Canadian Provinces bordering the US
• Uniform administration of motor fuels use taxation laws with respect to qualified motor vehicles operated in more than one member jurisdiction

IFTA’s Core Principles

• Base Jurisdiction
• Retention of Sovereign Authority to determine tax rates, exemptions and exercise other substantive tax authority
• Uniform definition of Qualified Motor Vehicle

 Base Jurisdiction

• Where qualified motor vehicles are registered (IRP)
• Where operational control and operational records are maintained or can be made available
• Where some travel is accrued

Tax collected through IFTA

• Motor fuel use taxes that are imposed by each jurisdiction on the consumption of motor fuel in qualified motor vehicles.

Qualified Motor Vehicle

• Motor vehicle used, designed or maintained for the transportation of persons or property and
• Gross vehicle or registered gross vehicle weight over 26,000 lbs. or 11,797 kgs.
• Three-axles regardless of weight
• Used in combination when the weight of the combination exceeds 26,000 lbs. or 11,797 kgs.

Who may license

• Any person based in a member jurisdiction operating a qualified motor vehicle in two or more member jurisdictions

Benefits to the Licensee

• One license and one set of decals for each qualified motor vehicle to operate through all member jurisdictions
• One tax return filed each quarter with the base jurisdiction
• One tax payment or refund
• Reduced administrative costs

Benefits to the Jurisdiction

• Fewer taxpayers
• Lower administrative costs
• Increased audit coverage
• Increased enforcement

The main thing to remember about IFTA is: An interstate motor carrier operating “qualified motor vehicle” between at least 2 member jurisdictions (the 48 contiguous states of the US and 10 Canadian provinces) must have an International Fuel Tax Agreement (IFTA) license and decals issued by their base jurisdiction. For more information on IFTA visit ExpressIFTA.com