“IFTA” stands for International Fuel Tax Agreement, which represents a tax collection agreement among the 48 contiguous United States and its 10 bordering Canadian Provinces.Owners of qualified heavy highway motor vehicles that operate in at least 2 out of the 58 total jurisdictions must file IFTA on a quarterly basis.
Reasons for IFTA:
IFTA’s official purpose according to the International Fuel Tax Agreement 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 the 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.
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.
Each state or province has a different rate and those rates can change each quarter. The state or province in which the vehicle is registered is considered to be its Base Jurisdiction. A Quarterly IFTA Return must be filed with the vehicle’s respective jurisdiction 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. This information can be kept on what are commonly referred to as trip sheets, or trip logs.
Since the data required filing IFTA is so incredibly detailed, many people receive Audits of their IFTA information. Proper record keeping can ease the audit process. ExpressIFTA.com 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! You can prevent an audit due to simple mistakes on an IFTA return by using ExpressIFTA help you keep accurate records.
To get started simply create an account and begin entering your trip sheet information. If you have any questions along the way, please do not hesitate to 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.
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