We offer IFTA compliance services that do include IFTA application, quarterly reporting and managing the record keeping on behalf of the carriers to ensure they meet all aspects of the IFTA regulation.
What is IFTA
The International Fuel Tax Agreement (or IFTA) is an agreement between the lower 48 states of the United States and the Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction.
An operating carrier with IFTA receives an IFTA license and two decals for each qualifying vehicle it operates and has to file quarterly fuel tax report. This report is used to determine the net tax or refund due and to redistribute taxes from collecting states to states that it is due.
The fuel tax agreement requires that drivers maintain all fuel tax records for at least four years. And your office will need to have the records on hand at times. You’ll also need to provide DMV auditors access to your records upon request.
Accuracy of reporting do matter. Filling false returns can result in fines in excess of $1,000 and late reports can result in penalty of $50 or 10% of the quarter’s net tax liability, based on which is greater.
What are the steps to file Quarterly IFTA returns:
Determine your average miles per gallon
Average Miles per gallon = Total Miles/ Total Gallon
Calculate your total fuel purchases in each jurisdiction.
For each state or province, add up the total number of miles you drove in that state. Divide that number by your average fuel mileage, determined above. The result is your total fuel consumption in that location. Remember to do this separately for each jurisdiction.
Find out how much fuel tax you owe to each location.
You can use the IFTA chart to look up the fuel tax rate by jurisdiction and fuel type.
Calculate your payment or refund.
For each location, add up how much fuel tax you owe. Then subtract the fuel taxes you already paid. The result is the payment you need to make or the refund you can get.
File your report
There are three different methods for IFTA filing: online, by mail, or in person. An online filing is considered received the day you submit it. A mail-in filing goes by the postmark date, while an in-person filing uses the delivery date to the office.
IFTA Reporting Due Dates
|Quarter Periods||IFTA Quarterly Tax Return Due Dates|
|1st Quarter (January – March 2023)||May 1st 2023|
|2nd Quarter (April – June 2023)||July 31st 2023|
|3rd Quarter (July – September 2023)||October 31st 2023|
|4th Quarter ( October – December 2023)||January 31st 2024|
Do carriers get audied for their IFTA fillings ?
Yes. IFTA jurisdictions agree to audit 3% of licensees each year. Even if you’ve followed all the guidelines to the letter, you could face an audit.