The IFTA reporting system has helped to simplify matters for trucking companies by minimizing the compliance requirements and reducing paperwork. If you have questions about the reporting system, or if you are new to the trucking business, here are some important details you need to know.
What is the IFTA Reporting System?
IFTA stands for the International Fuel Tax Agreement. A pact formed between the lower 48 states in the U.S. and the ten Canadian provinces. It requires all interstate motor carriers such as truck drivers to report fuel taxes. Areas not included in this system are Hawaii, Alaska, and the three northern territories in Canada.
The IFTA exists to replace the older fuel tax system. The old system required truckers to have a different decal for every state they operated in. The updated system greatly simplifies things and eliminates most of the hassle involved.
Which Vehicles Must Follow IFTA?
The International Fuel Tax Agreement is required for vehicles that meet the following specifications.
- Vehicles with two axles and a gross weight rating or a registered gross weight that is more than 26,000 lbs.
- Any vehicles that have three or more axles
- A combination of vehicles that have a total weight or weight rating that is higher than 26,000 lbs.
How Does it Work?
Every driver that owns a qualifying vehicle will need to submit an IFTA application. Alternatively, they can have their accountant or bookkeeper submit the application for them on their behalf. Once you submit your application, the vehicle owner receives an IFTA license and a decal for each qualifying truck or other vehicle they own and operate. Regardless of where their fuel is purchased, the amount is logged into their IFTA account from that point on.
As long as the vehicle is operational, the owner must file quarterly IFTA reports. This must occur even if the vehicle is not used for commercial purposes the entire time. All IFTA decals expire on December 31st every year. All carriers have until the last day of February the following year to re-register with IFTA.
When Should I File My IFTA Reporting?
There are specific times when you should file your IFTA reports:
- For the period between January and March, the IFTA report should be filed by April 30th.
- The period between April and June, the IFTA report should be filed by July 31st.
- For the period between July and September, the IFTA report should be filed by October 31st
- And for the period between October and December, the IFTA report should be filed by January 31st.
What Happens When You Do Not Pay or File Your Quarterly Return?
When you fail to file your quarterly IFTA return within 30 days of the due date, your license will be suspended and a jeopardy assessment is applied. If you file your return but do not make an IFTA tax payment within 30 days of the due date, your license will be repealed and you are given a jeopardy assessment. This includes not paying late fees, penalties, or interest.
Your license won’t be valid until you pay your IFTA fuel tax, interest and penalties. Once a jeopardy is assessed, you have 60 days to file and pay for the late return. After that time, you are responsible for paying the entire amount of the jeopardy. After your account is brought current, you will have to apply to have your license reinstated.
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Have more questions? TruckingOffice IFTA Resource Center may have the answers you need.
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