IFTA is the International Fuel Tax Agreement and is a tax collection agreement by and among the 48 contiguous States and the 10 Canadian Provinces bordering the US, in which motor fuels use taxation laws are uniform with respect to qualified motor vehicles operated in more than one member jurisdiction.
Who Must File?
An interstate motor carrier operating “qualified motor vehicles” 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.
If you have the IFTA license, you must file the Quarterly IFTA Return to your base jurisdiction.
Qualified motor vehicle means a motor vehicle or combination of vehicles used, designed, or maintained for the transportation of persons or property having:
Two axles and a gross vehicle weight exceeding 26,000 pounds;
Two axles and a registered weight exceeding 26,000 pounds;
Three or more axles regardless of weight; or
A combination weight exceeding 26,000 pounds.
Recreational vehicles are exempt from IFTA fuel tax reporting.
Base jurisdiction means the member jurisdiction where:
Qualified motor vehicles are based for vehicle registration purposes;
Operational control and operational records of the licensee’s qualified motor vehicles are maintained or can be made available in case of an audit; and
Some mileage is accrued by qualified motor vehicles within the fleet travelling through that jurisdiction
What is Required?
The following information is required on the IFTA quarterly tax return:
Total miles, taxable and nontaxable, traveled by the licensee’s qualified motor vehicles in all jurisdictions, IFTA and non-IFTA, including trip permit miles;
Total gallons of fuel consumed, taxable and nontaxable, by the licensee’s qualified motor vehicles in all jurisdictions, IFTA and non-IFTA;
Total miles and taxable miles traveled in each member jurisdiction;
Taxable gallons consumed in each member jurisdiction;
Tax-paid gallons purchased in each member jurisdiction; and
When to File?
Under IFTA, you are required to file Quarterly Fuel Tax Returns. IFTA Returns are due on the last day of the month following the end of each calendar quarter. To avoid penalty for late filing, the tax reports must be postmarked no later than midnight on the date indicated. If the last day of the month falls on a Saturday, Sunday or legal holiday, the next business day will be considered as filed timely. A quarterly fuel tax return must be filed even if the no fuel was used. You submit a “zero” report.
Penalties for Late/No 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. To avoid penalty for late filing, the tax reports must be postmarked no later than midnight on the date indicated. If the last day of the month falls on a Saturday, Sunday or legal holiday, the next business day will be considered as filed timely.
Interest is computed on all delinquent taxes dues each jurisdiction at a rate of .4167% per month. Even if you have a net refund, interest still applies to each jurisdiction for any underpayment of fuels use tax to that jurisdiction and is calculated beginning the day after the due date of the return for each month, or fraction of a month, until paid.
You also have to renew your IFTA decals, annually. Most states mail out the renewal papers, but it is your responsibility to renew. All quarterly returns must have been filed and all taxes must be paid in full in order to renew.
How to File?
Some states offer online filing for quarterly filing, while others require paper filing. Check your state requirements.
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