The International Fuel Tax Agreement (IFTA), an agreement among the 48 contiguous states of the United States and the 10 Canadian Provinces, simplifies the reporting of fuel taxes. Rather than producing multiple reports and managing state-by-state mandates, IFTA lets carriers operating in multiple jurisdictions register in and produce a quarterly report for just one single state.
While IFTA was meant to simplify and reduce paperwork for carriers whose trucks work across state lines, it has very specific requirements. This has led to some confusion as to what the report entails and how to complete it.
When the Report is Due
IFTA fuel reports are due four times a year, the last day of the month after each quarter closes. Even if no taxable fuel was used or operations were conducted during the reporting period, the IFTA fuel tax report is required.
The exact dates are April 30, July 31, October 31 and January 31. If the last day of the month falls on a Saturday, Sunday, or legal holiday, the next business day is considered the due date.
However, a licensee who operations less than 5,000 miles in all member jurisdictions other than the base jurisdiction during 12 consecutive months may request to report on an annual basis. This must be based on previous filing history and approval must be obtained from a licensee’s base jurisdiction. If obtained, the report is due January 31, following the close of the annual tax reporting period.
A penalty of $50 or 10% of the net tax liability, whichever is greater, is assessed on late-filed reports, failure to file, or for underpayment of tax due. There is still a $50 penalty even if the net tax liability is zero or a credit. Interest rate at 1% per month is assessed on all delinquent taxes due each jurisdiction.
What the Report Includes
The exact form may differ slightly by state. However, all reports require a significant amount of fuel and mileage data broken down for each jurisdiction traveled.
You must document total IFTA miles, non-IFTA miles, taxable miles, miles per gallon (MPG) for indicated fuel types. For MPG, mileage is rounded to the nearest whole mile. The report also includes taxable gallons of motor fuel purchased, tax-paid gallons, net taxable gallons, tax rate, tax or credit due, interest due and total due. All of this must be captured, as a separate line item, for each jurisdiction.
The fuel types included on the report may differ slightly by state, but include a combination of diesel/kerosene, gasoline, ethanol, propane, liquid natural gas, compressed natural gas, biodiesel, gasohol, methanol, A-55, E-85 and M-85.
What Fuel Purchases You Can Claim as a Tax-Paid Credit
If you made a retail fuel purchase, it can only be claimed as a tax-paid credit on the IFTA tax return if it was placed directly into the fuel tank of a qualified motor vehicle and the purchase price includes fuel tax paid to a member jurisdiction. Retain a receipt that shows evidence tax was paid to the applicable jurisdiction or at the pump.
The same is true of bulk fuel purchases. According to the IFTA, you may claim tax-paid credit for fuel withdrawn only “when the fuel is placed directly into the fuel tank of a qualified motor vehicle; the bulk storage tank is owned, leased, or controlled by the licensee; and either the purchase price of the fuel includes fuel tax paid to the member jurisdiction where the bulk fuel storage tank is located or the licensee has paid fuel tax to the member jurisdiction where the bulk fuel storage tank is located.” Receipts and records must identify the quantity of fuel taken from the licensee's own bulk storage and placed in its qualified motor vehicles.
What Records are Required
While licensees are not required to submit proof of tax paid purchases with their IFTA fuel tax returns, IFTA advises, to get credit for them, they must retain supporting documents and evidence. This must be in the form of a receipt, invoice, credit card receipt, or automated vendor generated invoice or transaction listing. It must document date of purchase, fuel type, seller’s name/address, vehicle registration number, purchaser’s name, total cost and gallons purchased.
The IFTA says these records may be kept on microfilm, microfiche or other computerized or condensed record storage system which meets the legal requirement of the base jurisdiction.
How to File Your IFTA Fuel Tax Report
There are two ways to file your return, depending on your home jurisdiction. The first is to complete report by paper and mail it in. The second is to submit the return electronically.
Tax return forms are made available – in either form – at no charge to each licensee at least 30 days prior to the due date. Both physical and electronic forms can be found through and are submitted to The Department of Revenue in the state or province through which you are licensed. You can find the IFTA tax form or online submission by visiting your Department of Revenue’s website.
In addition to the report, you must send a check or pay online (depending on your base jurisdiction) any tax payment due.
What Happens After You Submit
The IFTA reviews the report to calculate the total tax owed and/or refund due. The total amount is either paid to or refunded by the base jurisdiction that issued the license. Behind the scenes, your base jurisdiction takes care of redistributing or collecting funds amongst other member jurisdictions so you don’t have to deal with them each individually.
While possible, it is unlikely to get audited, especially if you submit accurately and on-time. Base jurisdictions conduct audits, on average, of only 3 percent of licenses each year. 25 percent of these audits must involve high-distance accounts and 15 percent must involve low-distance accounts.