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Guide To International Fuel Tax Agreement (IFTA) Registration

The International Fuel Tax Agreement, or IFTA for short, is an agreement between states in the U.S. and provinces in Canada to collect fuel use taxes. The IFTA agreement includes the 48 U.S. states and 10 Canadian provinces that participate.

When you buy fuel at the pump, you pay a fuel tax. The tax is used to pay for upkeep for roads and interstate highways. Years ago, every state had its own mandates and regulations regarding fuel use taxes. The problem is when you routinely buy fuel in one state and then drive to another state or Canadian province. Then things get a little trickier.

What is IFTA?

When that happens, the jurisdiction or states that you drive through do not get any tax revenue. The IFTA has solved that problem by taking the total miles driven in each jurisdiction and then applying the appropriate tax rate for that jurisdiction for those miles. IFTA helps ensure that each state or Canadian province that you operate your commercial vehicle in gets its fair share of tax revenue.

To register for the IFTA you must:

  • Register a base state –  Most trucking companies operate in multiple states. Therefore, you must choose a base state in which to register. Your base state is where you have a place of business, maintain mileage records, and register your vehicles.
  • Have a qualified vehicle – To qualify, your truck must travel in at least two IFTA jurisdictions. A qualified vehicle has two axles and weighs 26,000 pounds, has three axles, or weighs more than 26,000 pounds when used in combination.
  • Complete an application – Every vehicle must apply for an annual license.

Once approved, you must carry a copy of your distributed license. You will also be given two decals that you can place on either door. If you get a new truck, you must contact your local department of motor vehicles for an application for the new vehicle. It’s important to make sure that all of your IFTA information is in order.

IFTA Reporting Requirements

You must submit a fuel tax report four times per year. The report will show you whether you owe fuel taxes or are due a refund. If you owe taxes, then you must properly cover the payment. If you have accumulated a tax credit from tax-paid fuel, then a refund will be given. You’ll have to find out about the refund process for IFTA in your particular state or area of operation.

IFTA Stickers.

You need to properly display two IFTA stickers for each vehicle in your fleet. Make sure that you place the decals where they’re supposed to go – it’s probably best to avoid any confusion if the stickers are in the wrong place!

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IFTA, Inc.