Things you need to know about IFTA

The International Fuel Tax Agreement (IFTA) is an accord among 48 states of the United States and 10 provinces of Canada in a bid to simplify the reporting of fuel usage by motor carriers who operate in more than one jurisdiction. Before this, each state had its system, which made reporting system much more complicated.

How does it work?

Every motor carrier is assigned an IFTA licence number and carriers are required to file fuel tax four times a year (each quarter) to the state where their business is based. In case, any carrier has paid more, they will receive a refund.

IFTA works on certain principles. We have listed them below:

• The fuel tax is calculated based on the location of where the fuel was consumed
• The tax credit is determined based on where the fuel was purchased
• IFTA helps in determining the difference between fuel consumed and fuel purchased for every jurisdiction

Things to Remember: While purchasing fuel, carriers should keep their receipts – hard copy or electronic version.

Does your carrier need to obtain IFTA license?

• Two-axle Commercial Motor Vehicle (CMV) with a Gross Vehicle Weight Rating (GVWR) or Gross Combination Weight Rating (GCWR) of 26,001 pounds or more
• Three-axle CMV irrespective of their weight

Exemptions:

Vehicles solely used for personal use are exempted.

Documents you need to file IFTA?

• Reports of every trip with mileage in each state
• Receipts of fuel purchase
• IFTA license number and permit numbers

When do you need to file IFTA?

• Quarter Due Date
• January – March April 30
• April – June July 31
• July – September October 31
• October – December January 31

What are the consequences if you fail to file IFTA?

Carriers can incur a penalty of $50 or 10% of the amount of tax or revocation of IFTA licence.

TXT Electronic Logging Device (ELD) has a feature that simplifies and automates the Cross-Border Fuel Tax Reporting and eliminates the risk of penalty by removing the burden of manual collection of mileage state-wise or unit-wise. TXT ELD brings you a smart solution for your fleet with 100% FMCSA complied device.

The automated report on Fuel Tax Reporting is generated based on Data obtained from Vehicle Engine Control Module unit and it is 100% reliable. TXT ELD eases the process by increasing the productivity and eliminating the time-consuming burden of paperwork through automated collection of mileage, fuel receipts etc.