International Fuel Tax Agreement (IFTA)
The online IRP/IFTA System allows for new registrations, supplemental registrations and renewals.
When your company operates qualified motor vehicles that cross state lines, you are required to obtain an International Fuel Tax Agreement (IFTA) License or obtain a 120-hour fuel permit. The IFTA program allows all states and participating Canadian provinces to collect fuel taxes on behalf of all participating jurisdictions, based on total distance operated in all jurisdictions, using quarterly reporting of your mileage and fuel purchased in each jurisdiction.
Who must obtain an IFTA license? You must obtain an IFTA license if you operate qualified motor vehicles in 2 or more member jurisdictions unless each qualified motor vehicle is operating under a 120-hour fuel permit.
- Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or
- Having three or more axles regardless of weight; or
- Used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight.
What states and provinces participate in IFTA? All contiguous U.S. states are included in IFTA. Alaska and Hawaii are not included. Some Canadian provinces are included in this program as well. Fuel taxes are distributed to states and provinces based on the number of miles that a motor carrier traveled in that state or province. Payment is based on the fleet's average mpg.
What is the alternative to obtaining an IFTA license? The alternative to obtaining an IFTA license is to purchase a 120-hour fuel permit each time one of your vehicles engages in commercial motor vehicle transportation across state lines.
How does IFTA work? Fuel taxes are paid to the jurisdictions in which mileage is incurred, (based on the fleet's miles per gallon), even if fuel is purchased in a different jurisdiction. The amount of fuel tax paid to a given jurisdiction depends on the fuel tax rate in place in the jurisdiction in which mileage occurs. The payment of fuel tax is accomplished through a quarterly tax report (the IFTA Quarterly Tax Report).
How do you pay the fuel taxes that are due to each jurisdiction? Each quarter, you pay fuel taxes to the jurisdictions in which you travel, based on the mileage in each jurisdiction, the fuel tax rates in each jurisdiction, and the fuel efficiency of your fleet. The quarterly tax return gives you credit for all fuel tax paid during each quarter and charges taxes to you where fuel taxes were insufficient to cover the fuel used in a jurisdiction.
How does the correct amount of fuel tax get paid to each state or province? Quarterly reporting is used to determine your fuel efficiency rate, where mileage was incurred, and where fuel was purchased. Based upon this information, the IFTA Program assesses additional fuel taxes, gives credit for over payments, and distributes fuel taxes to the participating jurisdictions.
How do you know if you owe additional taxes or are due a refund? Quarterly reporting is used to determine if you owe additional taxes or are due a refund.
What items do you receive when you participate in IFTA? Each year, 1 license is issued to the licensee (such as your company). You may copy the license and place it in each vehicle operating under that license. In addition, you will receive a set of decals for each vehicle. Each set contains 2 decals. One decal is to be placed on each side of each vehicle covered by the license. When you renew your IFTA registration each year, you will also order new decals. You may order additional sets of decals at any time throughout the license year.
What is the cost? Each pair of decals is $2.00.
What are the requirements for participating in IFTA? For first-time registration, complete the IFTA License Application. For renewal, complete the IFTA Renewal Form that you will receive in the mail or, if for some reason you do not receive it, complete the IFTA License Application. For IFTA quarterly reporting, complete the IFTA Quarterly Tax Report, include a payment if one is due, and mail both to the address shown on the form. Completed forms must be mailed to the address shown on each form or brought to the address listed on each form.
How do you dispute a decision made by the Transportation Division? You must file an application protesting the decision. The rules governing this type of proceeding can be found in Chapter 5. You may prepare your own application or use this sample dispute application.
What's the best method to help me determine if I have all my paperwork together to apply for an IFTA license? A checklist is available to help you ensure you have all the paperwork needed.