I t’s safe to say that drivers aren’t fans of IFTA. Most drivers say that’s complex, that there should be an easier way to calculate, and that it’s boring.
We’ll do our best to make IFTA more familiar to you by going through the basics here.
IFTA aims to simplify the USDOT and FMCSA’s fuel tax collection procedures. All interstate commercial carriers in the United States are subject to this. IFTA licensing is required for carriers that operate across two or more states. They must also display their current IFTA decals at all times.
IFTA currently has 58 member jurisdictions, including 48 US states and ten Canadian provinces.
Under IFTA, motor carriers file a single quarterly fuel tax report with their home state. They do this every three months. The IFTA report tells you how much tax you owe or how much you get back. It will then distribute the taxes to each of the member states. It is based on how many miles you drive in that state.
The key to success is accuracy. For trucks, reported average miles per gallon should range between 5 and 10 MPG and stay reasonably constant over time. If your measurements go outside of this range or greatly vary from quarter to quarter, be sure to explain why.
If you don’t file and pay the money you owe by the deadline, you’ll get an estimated evaluation based on the best information we have. Tax returns and other debts must be paid before you can renew your IFTA and IRP credentials.
Any carrier who fails or refuses to file a tax report might have their license revoked or suspended by a jurisdiction.
Many carriers have IFTA experts on staff so that drivers may concentrate on driving. If you’re a part of a larger carrier, we recommend that you approach your company to file IFTA on your behalf. Some carriers have software and technology that can automate and improve the accuracy of a large portion of this process.
