What is the Meaning of IFTA?

Trucking companies are one of the pillars of American commerce, so they must adhere to specific standards and processes to preserve their safety and integrity.


The majority of carriers delegate compliance to their fleet managers. Licensing, trucking permits, USDOT numbers, Hours of Service restrictions, material regulations, and the International Fuel Tax Agreement (IFTA) are all part of this.


What is IFTA?


The International Fuel Tax Agreement is a pact between states in the United States and provinces in Canada. Motor fuels are taxed, and IFTA permits commercial motor carriers to register in one state and pay their fuel taxes to all participating regions proportionally.


IFTA was established for truckers that frequently travel across state lines. It streamlines fuel tax accounting and payment and reduces paperwork for trucking companies.


IFTA Licence Application


IFTA application forms come in various formats and may be used for a variety of purposes.

The following are some of the basic carrier details necessary for new IFTA applications:


  • The registered business name
  • Postal address
  • USDOT number (federal business number)
  • Completed IFTA forms can be mailed after being obtained online. IFTA forms can also be delivered by fax or through taxpayer service offices in other counties.


How does IFTA work?


A truck is IFTA registered and receives a fuel tax permit from one state under this arrangement. The tax on gasoline purchased in any participating state or province is credited to the permit owner’s account when the vehicle travels through that state or province. A fuel tax report is prepared at the end of each quarter, showing miles driven and gallons of fuel used in each zone.


The IFTA aids in estimating the amount of tax payable or tax credit for each state, determining the tax responsibility for each, and ensuring that funds are distributed appropriately.


Who can benefit from IFTA?


If a carrier is situated in a member state and operates across two or more member states, it must have an IFTA license. Another factor to consider is the sort of vehicle they use.


A qualified motor vehicle, according to IFTA, is one that is manufactured and utilized to convey property or persons. Vehicles that qualify must also meet one of the following criteria:


  • Any vehicle with two axles and a gross vehicle weight of more than 11,797 kilograms (26,000 pounds) is considered a heavy vehicle.
  • Any vehicle that has three or more axles, regardless of its weight.


IFTA Fuel Tax Reporting and Violations

Carriers must submit a quarterly tax report that includes motor fuel use and distance traveled in IFTA member states to their base jurisdiction for all of their qualifying vehicles. A report must be filed even if the carrier has not undertaken any operations or utilized taxable fuel for a certain time.


License holders must keep thorough records of mileage, motor fuel purchased and utilized, any trip permits, monthly/quarterly summaries, and Individual Vehicle Distance Records (IVDRs) in addition to filing tax returns.


Failure to comply or late filing will result in penalties. Each IFTA jurisdiction has its own set of rules, but most adhere to a general structure. You may face a fine, fee, or citation if you travel to an IFTA state without permission.


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