The International Fuel Tax Agreement (IFTA) is an agreement between all 48 contiguous states, and 10 Canadian provinces. It enables participating jurisdictions to cooperate in the collection and administration of motor fuel taxes. An IFTA account is set up with the base state, which authorizes travel in all IFTA jurisdictions. Then a single quarterly report must be filed with the base state, reporting miles traveled and fuel purchased in each state. The base state is responsible for dispersing the funds to the other jurisdictions. You need an IFTA license if you travel in two or more member jurisdictions, and if your vehicle either weighs more than 26,000 pounds, OR has three or more axles, regardless of weight.
A fuel tax liability is created when the amount of fuel consumed is larger than the amount of fuel purchased in a particular state during any one-tax quarter. If the state charges a fuel surcharge over and above the specific fuel tax levied, it will generally be charged on the total amount of fuel consumed within that state during that same quarter regardless of the amount of fuel purchased within that same state. Anytime there is more fuel purchased than consumed in a particular state during a tax quarter a fuel tax credit is created and is used to offset any fuel tax liability during that same quarter.
Rapid Document Services, Inc. can help you through this complex tangle of tax compliance with our simple, easy and affordable fuel and road tax service. Here’s how it works: We will supply you with an approved trip report that when properly completed will keep you in compliance with the IFTA requirements (This same report will also keep you in compliance with IRP record keeping requirements) You keep your trip records (including fuel Purchases) per trip on the trip reports. At the end of each quarter you will either forward a tally sheet with all mileage and fuel totals for each state in which you had operations or the trip sheets and copies of your fuel receipts along with your tax returns. This documentation must be in our office by the 15th of the month following the end of the quarter in order to ensure a timely filing of your returns. We send out reminders 10-15 days before the end of each quarter advising you of the upcoming tax-filing period. Please be advised that if you send us your trip sheets instead of just mileage and fuel totals there will be an extra fee incurred to cover the time it takes to tally your totals. Whichever method you choose, getting your paperwork to us on time saves you big money. State fines and penalties often exceed the actual amount of the tax liability so it is critical to make timely filings.
Our account managers maintain the highest level of contact with all of the various authority agencies, which ensures our ability to process authority and permit applications with the greatest speed and accuracy to ensure compliance and operational status