Rajan Wilcox
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement among the 48 contiguous US states and 10 Canadian provinces. IFTA taxes can be difficult to understand, as each state has its own fuel tax rates, and your taxable amount depends on where you consumed the fuel. For example, if you fuelled your vehicle in one state but drove it in another, you may have overpaid fuel tax in the first state and underpaid in the second. IFTA taxes are filed quarterly, and failure to file on time can result in a penalty.
| Characteristics | Values |
|---|---|
| What is IFTA? | International Fuel Tax Agreement |
| Who does it apply to? | Interstate carriers |
| Where does it apply? | 48 contiguous US states and 10 Canadian provinces |
| How often are tax returns due? | Quarterly |
| When are they due? | Last day of the month following the end of the calendar quarter |
| What is the penalty for late filing? | $50 or 10% of delinquent taxes, whichever is greater |
| What is the interest rate on delinquent taxes? | 9% annually, 0.75% monthly |
| What is the Special Fuel tax rate in Indiana from July 1, 2024, to June 30, 2025? | $0.59 per gallon |
| What is the IFTA tax for a route between Detroit, MI and Cincinnati, OH (three times per week)? | $43.20 per quarter |
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What You'll Learn
IFTA quarterly tax returns
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement among the 48 contiguous US states and 10 Canadian provinces. IFTA quarterly tax returns must be filed by taxpayers to report their fuel tax payments across all member jurisdictions. These returns are due on the last day of the month following the end of each calendar quarter. For instance, the due date for the first quarter (Q1) of 2023 would be April 30. If the due date falls on a weekend or a legal holiday, the next business day is considered the due date.
The IFTA quarterly tax return process involves reporting the total miles travelled and the total gallons of fuel purchased during the quarter for each jurisdiction. This includes any tax-exempt miles, which must be properly documented and deducted from the total taxable miles. It is mandatory to file a return even if there were no operations during the quarter, known as a "no operations" return.
Taxpayers can file their IFTA quarterly tax returns online or through the mail. Online filing is available via the Motor Carrier Services (MCS) system, while paper returns can be mailed to the relevant authority, such as the SCDMV Motor Carrier Services in South Carolina. Some states, like Texas, require electronic filing, accepting paper reports only in cases of hardship when electronic filing is unavailable.
To complete the IFTA quarterly tax return, taxpayers need to provide detailed information, including the reporting period, fuel type, total miles travelled, and fuel purchased for each jurisdiction. This information is used to calculate the tax or refund due for each member jurisdiction. It is important to note that all numbers must be rounded to the nearest whole gallon or mile.
Failing to file IFTA quarterly tax returns on time or neglecting to pay the full amount due can result in penalties and interest charges. The penalty for late filing, non-filing, or underpayment is $50 or 10% of the delinquent taxes or net tax due, whichever is greater. Additionally, interest accrues monthly on delinquent taxes, with the current annual interest rate set at 9%. Non-compliance with IFTA filing requirements may also lead to the suspension or revocation of the taxpayer's IFTA license and decals.
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IFTA tax rates
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement between the 48 contiguous US states and 10 Canadian provinces. Each member jurisdiction sets its own tax rate, and interstate carriers are required to register their vehicles under the IRP and license their fleets under the IFTA if they are going to operate outside of their base jurisdiction. For example, in New Jersey, IFTA tax returns can be handled online, and the state collects a net of about $14 million in fuel taxes annually from approximately 12,000 IFTA accounts.
In Texas, IFTA returns are due quarterly, on the last day of the month following the end of the calendar quarter. A penalty of $50 or 10% of delinquent taxes (whichever is greater) is imposed for failing to file a report, filing late, or underpaying taxes. Interest is also assessed on all delinquent taxes for each month or fraction of a month, beginning on the first day after the due date. The current annual interest rate is 9%, with a monthly rate of 0.75%.
IFTA, Inc. offers an IFTA Subscriber program for a fee of $400, which provides access to jurisdiction contact information, discounts on events, the IFTA Newsletter, meeting and training materials, and an IFTA Subscriber Message Board.
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$7.99
IFTA tax calculation
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement among the contiguous 48 states of the US and 10 Canadian provinces. IFTA tax calculation involves determining fuel consumption and tax owed in each jurisdiction. Here is a step-by-step guide to calculating IFTA tax:
Track Total Miles Driven in Each Jurisdiction
Record the miles driven in each state or province using trip logs, odometer readings, or GPS tracking. Modern GPS and fleet management systems like Motive ELD can automatically record state-line crossings and calculate jurisdictional mileage.
Calculate Overall Fuel Mileage
Use the formula: Total Miles Driven ÷ Total Gallons Purchased = Overall Fuel Mileage. This helps determine the average fuel efficiency of the vehicle.
Determine Fuel Consumed per Jurisdiction
Calculate the fuel consumption for each jurisdiction using the formula: Total Miles Driven in Jurisdiction ÷ Overall Fuel Mileage = Fuel Consumed in Jurisdiction. This allocates fuel consumption based on the distance travelled in each jurisdiction.
Apply the Jurisdiction's Tax Rate
Multiply the fuel consumed by the tax rate of the respective jurisdiction to calculate the tax owed for that jurisdiction: Fuel Consumed in Jurisdiction × Tax Rate = Tax Owed. Tax rates may vary across jurisdictions and can change quarterly, so refer to the latest IFTA tax matrix for accuracy.
Reconcile Tax Paid and Tax Owed
Finally, calculate the net tax payable or refund due using the formula: Tax Owed – Tax Paid = Net Tax Payable or Refund. This step considers the taxes already paid at the point of fuel purchase.
To simplify the IFTA tax calculation process, online tools such as the IFTA Tax Calculator are available. These tools automate the calculation, enhance accuracy, and streamline reporting procedures.
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IFTA license and registration
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement among the 48 contiguous US states and 10 Canadian provinces. IFTA requires qualifying commercial motor vehicles travelling through multiple states or provinces to file a consolidated report of motor fuel taxes. Interstate carriers must register a vehicle under the IRP and license their fleets under the IFTA if they are going to operate outside of their base jurisdiction and meet certain vehicle weight criteria.
To obtain an IFTA credential, you must meet the following criteria:
- Operate a qualified motor vehicle with a valid Colorado registration (either IRP or county registration) and have Colorado as your base jurisdiction.
- Have a valid business registration with the Colorado Secretary of State.
- The name and Federal Tax ID Number on the IFTA application must match the registrant information for the registered vehicle.
- You cannot be out of compliance with the IFTA program for another state or Canadian province, and you cannot owe the Department IFTA taxes or returns.
The IFTA license application process can be completed online or by mail. Applicants will need to provide a Social Security Number (SSN) and a Federal Employer Identification Number (FEIN). Once the application is processed, the IFTA license and decals will be mailed to the provided address. The IFTA license is valid for the current calendar year and expires on December 31st. Copies of the license must be made and carried in each qualified motor vehicle.
IFTA returns are due quarterly, on the last day of the month following the end of the calendar quarter. A penalty of $50 or 10% of delinquent taxes, whichever is greater, is imposed for late or missing reports and underpayment of taxes. Interest is also assessed on all delinquent taxes, with a current annual interest rate of 9%.
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IFTA tax payment
The International Fuel Tax Agreement (IFTA) is a fuel tax reciprocity agreement between the 48 contiguous US states and 10 Canadian provinces. Each member jurisdiction sets its own tax rate.
Qualifying commercial motor vehicles travelling in more than one US state or Canadian province are required to file a consolidated report of motor fuel taxes under the IFTA. This includes gasoline, diesel fuel, liquefied gas, compressed natural gas, and liquefied natural gas taxes.
Motor carriers can apply for an IFTA license online, and the application takes about 10 minutes to complete. Once approved, the IFTA license and decals will be mailed to the address provided. There is no fee for the license, which is valid from January 1 through December 31. However, there is a fee for the decals, which must be displayed on qualified motor vehicles.
IFTA tax reports should be filed electronically and are due quarterly on the last day of the month following the end of the calendar quarter. A penalty is imposed for late or missing reports, and interest is assessed on all delinquent taxes.
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Frequently asked questions
IFTA stands for the International Fuel Tax Agreement, a fuel tax reciprocity agreement among states of the United States and provinces of Canada.
Each member jurisdiction sets its own tax rate. For example, from July 1, 2024, to June 30, 2025, the Special Fuel tax rate in Indiana is $0.59 per gallon.
IFTA returns are due quarterly, on the last day of the month following the end of the calendar quarter.
There is a penalty of $50 or 10% of delinquent taxes, whichever is greater, for the failure to file a report, for filing a late report, or for underpayment of taxes due. Interest is also assessed on all delinquent taxes for each month or fraction of a month beginning on the first day after the due date.
You can apply for an IFTA license by submitting an IFTA-1A Application to your state's Department of Transportation or Revenue.
