Understanding IFTA (International Fuel Tax Association) Fuel Tax Requirements
Freight Brokers who are interested in being professionals with services they can offer must understand that each trucking company operating within the lower 48 States over the road must file quarterly IFTA fuel Tax Reports. Understanding what IFTA is and how to assist the trucking company will ensure your services and skills are highly desired.
IFTA is International Fuel Tax Agreement and is an agreement among the lower 48 U.S. states and Canadian provinces to simplify reporting of fuel use by carriers who drive in multiple states. Carriers file a quarterly fuel tax report that determines their tax and distributes it to the states. Your truck must have an IFTA decal on it, and you have to apply for a new one at the beginning of every year.
Filing Your IFTA Report
IFTA is International Fuel Tax Agreement and is an agreement among the lower 48 U.S. States and Canadian provinces to simplify reporting of fuel use by carriers who drive in multiple states. Owner Operators must file quarterly their IFTA reporting so that fuel taxes are distributed to each state within the IFTA agreement.
IFTA was enacted to replace the old fuel tax system. Before each truck was required to have a sticker of each state they passed and operated within.
IFTA was put in place to help trucking companies simplify their fuel tax payments. It allows the trucking company to pass thru each State while moving freight and to quarterly make one payment within IFTA to be disbursed. To qualify for IFTA, a trucking company must meet the requirements below:
A. Those with two axles and a gross vehicle weight rating or registered gross vehicle weight above 26,000 pounds
B. Those of any weight which have three or more axles
C. Any combination of vehicles with a total gross vehicle weight or weight rating above 26,000 pounds
Receiving Your IFTA
The trucking company will receive an IFTA license and IFTA decal for each vehicle they have in their company. The trucking company is then required to file reports on fuel purchase on what’s called a fuel tax report and this is done every three months. These reports will allow IFTA to figure the amounts owed or if there is an amount to be refunded on quarterly fuel taxes.
Who Qualifies for IFTA?
IFTA applies to commercial vehicles only that are operating for moving freight within Canada and North America. Buses, campers, and trucks used for personal recreation are not required to obtain an IFTA license or decal.
Every owner of a qualified commercial motor vehicle must submit an IFTA application and file quarterly IFTA fuel tax reports. Each trucking company may submit this report on their own or they may have a qualified company such as Logistical Forwarding Solutions do on the trucking company behalf.
Due dates for IFTA Quarterly Fuel Taxes Are Listed Below:
· For January through March, the due date is April 30th
· For April through June, the due date is July 31st
· For July through September, the due date is October 31st
· For October through December, the due date is January 31st
IFTA decals expire every year on the 31st of December. Carriers have until the end of February of the next year to re-register.