IFTA is the International Fuel Tax Agreement. Through IFTA, member jurisdictions act cooperatively to collect and administer taxes related to motor fuel usage.
The purpose of IFTA is to establish and maintain the concept of one fuel use license for interstate carriers and one administering base jurisdiction for each license holder. An IFTA license allows a taxpayer to file one tax report that covers all member jurisdictions.
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Which jurisdictions are members of IFTA?
The 48 contigious US States and 10 Canadian Provinces are members of IFTA.
USA: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.
Canada: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan
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When should I apply for an IFTA license?
You should apply if you are based in a member jurisdiction and operate a qualified motor vehicle in 2 or more member jurisdictions.
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What is a qualified motor vehicle?
This describes a motor vehicle that is used, designed, or maintained for transportation of persons or property and:
1) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or
2) has three or more axles regardless of weight; or
3) is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight.
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How does IFTA work?
The IFTA operating principle:
- Fuel tax owed is calculated based on where the fuel was consumed.
- Tax credit is determined by where the fuel was purchased.
- IFTA finds the difference between fuel consumed and fuel purchased for each jurisdiction.
IFTA Rates - Each member jurisdiction sets its own tax rate (and you can access all jurisdictions IFTA rates from 2010 to today in eTruxFuel).
Filing deadlines for each quarter – April 30th for Quarter 1, July 31st for Quarter 2, October 31st for Quarter 3, and January 31st for Quarter 4. Late filing will result in late penalties and/or interest rates.
Penalties – A penalty of $50 or 10% of delinquent taxes, whichever is greater, will be charged for failing to file a tax return, filing a late tax return, and underpaying taxes due.
Interest Rates - The current IFTA annual interest rate is 6% (increasing to 7% in 2019). Your base jurisdiction, for itself and on behalf of other jurisdictions (states/provinces) will charge interest on all delinquent taxes due to each jurisdiction, except IFTA taxes already collected by other jurisdictions according to IFTA procedures.
For more information about IFTA, visit the official website at https://www.iftach.org/
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eTruxFuel can do all of the fuel tax reporting work for you.
Run unlimited IFTA reports and submit your IFTA state forms online through your state portal.
Want to learn more?
Take the free trial, and visit the Help Video Library to see how it works.