IFTA Tax, who pays, and who doesn’t?

The 3rd quarter of the year ended just a few days ago and trucking companies all over the country are reconciling fuel purchases and miles driven to ensure proper International Fuel Tax Agreement (IFTA) tax filings. If you are not in the trucking business, IFTA is just another acronym to be thrown around, but here is a quick run down so that you can look smart at social gatherings or answer a jeopardy question in the future.

What is IFTA?

According to the Wyoming State Department, “IFTA is an agreement among most U.S. states and Canadian provinces to simplify the reporting of fuel used by motor carriers operating in more than one jurisdiction. People who operate qualified motor vehicles are subject to IFTA licensing.

A qualified motor vehicle is a motor vehicle used, designed or maintained for transportation of people or property and:  

  • Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,793 kilograms; or
  • Having three or more axles regardless of weight; or
  • Is used in combination when the weight of such combination exceeds 26,000 pounds or 11,793 kilograms gross vehicle or registered gross vehicle weight.
  • Qualified motor vehicle does not include recreational vehicles.

Base jurisdiction is the member jurisdiction where the qualified motor vehicles are based for registration purposes and where the operational control and operational records of the licensee’s qualified motor vehicle are maintained or can be made available.”

Why does IFTA exist?

According to keeptruckin.com, “Prior to IFTA, truckers were required to obtain fuel permits from every single state they entered. Not only was the process inefficient, but it also meant additional costs in the form of lost time, fuel burned en-route to permit purchasing centers, and the applicable fees. Fleets also had to comply with inconsistent filing periods, rules, definitions, and reporting requirements that involved hours of clerical work. IFTA has established uniformity and efficiency in fuel tax payments among member states. According to estimates, IFTA saves trucking businesses millions of dollars annually in administrative costs.”

When does the government collect IFTA taxes?

IFTA taxes are collected quarterly and the monies are distributed to all the states at the federal level.



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