Wednesday, October 3, 2012

What is IFTA (International Fuel Tax Agreement)?

The term IFTA is short for International Fuel Tax Agreement, which represents a tax collection agreement among the 48 contiguous United States and its 10 bordering Canadian Provinces.  IFTA is filed on a quarterly basis for qualified highway motor vehicles that operate in at least 2 out of the 58 total jurisdictions.  

Who Must File IFTA?
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.

How Does IFTA Work?
The state or province in which the vehicle is registered is considered to be its base jurisdiction.  IFTA must be filed with the vehicle’s respective jurisdiction each quarter. Each state or province has a different rate and those rates can change each quarter.
Find the current rates at 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.  

The Purpose of IFTA
According to the International Fuel Tax Agreement, its purpose 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 its 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.

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.

Organizing IFTA
Since the data required filing IFTA is so incredibly detailed, many people receive audits of their IFTA information. This can be prevented by better record keeping.   You will want to keep accurate trip sheets and fuel receipts.

As a premier processing agency, Truck Services of North America can assist with your IFTA, and many other services.  TSNA takes the paperwork out of your way. For more details contact us at or call 803.386.0320.

No comments:

Post a Comment