October 11, 2023
6 min read
IFTA stands for the International Fuel Tax Agreement – it is required in 48 out of the 50 states in the USD (excluding Alaska and Hawaii) and 10 provinces of Canada (northern Canadian territories do not participate). IFTA significantly simplifies fuel tax reporting and payments for owner-operators.
Before IFTA, each truck was required to have a separate decal for every state it operated in. Fleets also had to deal with numerous rules, definitions, filing periods, and reporting requirements – it involved hours of clerical work.
IFTA benefits both: the owner-operators and the states (provinces).
First of all, it simplifies the payment of taxes: there is one tax report that represents the net tax to all jurisdictions. It enables inter-jurisdictional carriers to use a single fuel tax license to report and pay taxes on the fuel their vehicles consume.
Secondly, IFTA ensures that each state or jurisdiction gets its share of tax revenue.
And last but not least, it reduces the number of forms and decals the trucker must keep track of – it saves costs and time for the inter-jurisdictional carrier.
IFTA applies to carriers that have qualified motor vehicles used, designed, or maintained for the transportation of persons or property and have:
Besides, motor vehicles must be used for business purposes and travel between at least one other jurisdiction.
To comply with IFTA basics, you must do the following:
Fuel taxes are calculated quarterly, as previously stated, and any taxes owed are due at the end of each quarter, on April 30, July 31, October 31, and January 31. It is easy to miss a deadline, especially if you operate your business on your own, so don’t wait until the last minute to prepare your paperwork for filing.
For your trucking company to stay compliant, you must learn how to properly file IFTA reports. This is more important than you would think. Even slight mistakes on your IFTA forms can result in significant fines and penalties, and in certain cases, an audit. It must be avoided at all costs.
IFTA is entirely dependent on the owner-operator to accurately report mileage traveled and fuel that was purchased and consumed. You can avoid the IFTA hassles with the appropriate assistance.
All of your IFTA reports will be set up, maintained, and filed by Fleet Care Group. We will handle all of the tedious work for you, ensuring that you pay only what you owe and nothing more. You’ll be amazed at how simple it can be.