What is IFTA?
The International Fuel Tax Agreement (IFTA) is an agreement that allows motor carriers to report and pay taxes for the fuel their vehicles consume across the states using a single fuel tax license. Prior to 2016, each state had their own fuel system.
How Does IFTA Work?
When motor carriers purchase fuel, they are required to keep documentation of every purchase. They must keep all their receipts, whether that be hard copies or electronical version from a fuel card the company might be using. Each quarter (4 times a year) motor carriers must submit their fuel tax payments to the state in which their business is located. If a carrier has overpaid, they will receive a refund/credit for the money that they are owned. Vice versa, if a motor carrier has underpaid, they will owe the remaining balance.
Which Motor Carriers are Required to Obtain an IFTA License?
A commercial motor vehicle with two axles and a gross vehicle weight rating or gross combination weight rating of 26,001 pounds or more. As well as a commercial motor vehicle with three or more axles regardless of weight.
What Documentation is Required for IFTA Filing?
Fuel reports (receipts, fuel card logs) – fuel purchases in each state
Trip reports – containing the milage & route traveled in each state
IFTA license number and permit number (KYU and NYHUT)
When Must IFTA Be Filed?
1st Quarter (January- March) ———————–> April 30, 2021
2nd Quarter (April – June) —————————> August 2, 2021
3rd Quarter (July – September) ———————-> November 1, 2021
4th Quarter (October – December) ——————> January 31, 2022
What Happens if Fuel Taxes Aren’t Filed?
IFTA legislation states that a penalty of $50.00 or 10% of the taxes owed (whichever is greater) will be calculated on late-filed reports, failure to file, or underpayment of tax due.