How to File for IFTA Fuel Taxes

by John Lister; Updated September 26, 2017

The International Fuel Tax Agreement (IFTA) covers all U.S. states except Hawaii and Alaska, and all Canadian provinces but the Northwest Territories, Nunavut and Yukon. Because of IFTA, motor carriers such as haulage firms can complete a single quarterly report for driving activities across all the states and provinces. Central processing then determines the carrier's total fuel-tax liability and how this is divided among the authorities. The carrier then makes a single payment or receives a single rebate based on the difference between the total owed and the total already paid when buying gas.

Step 1

Register for an IFTA license with your state's taxation department. To qualify, each vehicle covered by the license must meet one of three conditions: having three axles; having two axles and weighing more than 26,000 pounds; or being used in a combination that totals 26,000 pounds. This does not include vehicles such as caravans that are used for purely domestic purposes.

Step 2

Attach the decals supplied alongside the license to each vehicle. There must be two decals on a vehicle, one on the outside of either side of the cab. The decals and license must both be renewed annually.

Step 3

Gather together records of the mileage traveled on each trip, broken down by state or province.

Step 4

Gather together receipts for all fuel purchases, including fuel put into vehicles at gas stations and fuel bought for a storage facility.

Step 5

Complete the relevant state taxation department form for a fuel tax report and submit it by the deadline. Each report is due one month after the end of the calendar quarter it covers, meaning the deadlines are April 30, July 31, October 31 and January 31. A report must be submitted every quarter regardless of whether any fuel was used.

Tips

  • Some states issue template forms such as computer spreadsheets to make it easier to organize and report the data.

    Some states allow an exemption for off-road travel, meaning driving other than on public highways. This can include driving within a commercial facility.

Warnings

  • Most states apply penalties for late filing of a fuel tax report.

    A minimum of 15 percent of licensees in each state or province are audited every year. If the supplied records prove inaccurate or insufficient, liabilities will be calculated using assumptions that will often be unfavorable to the company, such as an assumption that it used one gallon of fuel for every four miles traveled.

About the Author

A professional writer since 1998 with a Bachelor of Arts in journalism, John Lister ran the press department for the Plain English Campaign until 2005. He then worked as a freelance writer with credits including national newspapers, magazines and online work. He specializes in technology and communications.