If you are considering getting into the hotshot trucking business, it is important that you totally understand the requirements of the International Fuel Tax Agreement (IFTA). The IFTA which is an agreement to simplify the reporting of fuel used by commercial motor vehicles (CMV)s operating in more than one jurisdiction. You qualify for an IFTA license if you operate your qualified motor vehicle in any U.S. state or Canadian province that is a member of the International Fuel Tax Agreement.
- CMV is used or designed to transport property.
- CMV has 3 or more axles OR has 2 axles and a gross vehicle or registered gross vehicle weight of more than 26,000.
Why Should I Register for the IFTA?
The IFTA license offers several benefits to the interstate/inter-jurisdictional motor carrier. These benefits include one license, one set of decals, and one quarterly fuel tax report that reflects the net tax or refund due. In addition, your fuel tax records will generally be audited only by your base jurisdiction. These advantages result in cost and time savings for the carrier and the member jurisdictions.
What Places Do Not Honor IFTA Credentials?
While IFTA is honored almost everywhere, there are various places that do no honor IFTA credentials.
Places such as:
- United States: Alaska, Hawaii, and the District of Columbia
- Canada: Northwest Territories, Nunuvit, and Yukon
- Mexico: All States and the Federal District
If you plan to travel in these jurisdictions, contact them for information regarding their fuel tax reporting requirements.
Which Taxes Does IFTA Cover?
IFTA covers fuel taxes only. It does not cover road taxes, weight mileage taxes, or any other jurisdiction-specific taxes.
If you travel in an IFTA jurisdiction without valid IFTA credentials or a fuel trip permit, you may be subject to a penalty, fine, or citation, depending on the jurisdiction’s laws.
When Are IFTA Reports Due?
IFTA reports are due each quarter.
- The due date for the January – March quarter is April 30th.
- The due date for the April – June quarter is July 31st.
- The due date for the July – September quarter is October 31st.
- The due date for the October – December is January 31st.
You must maintain records that will adequately document all of the information you provide on your quarterly fuel tax reports. Usually, you must maintain records to document all miles you travel. This does include the date of your trip, route of travel, total trip miles, and miles traveled in each jurisdiction. You must also keep all receipts for fuel you buy and place into your vehicles. If you maintain a bulk fuel storage facility, you must maintain additional records.