If you operate a trucking business that crosses state or provincial borders, understanding IFTA (International Fuel Tax Agreement) reporting is essential. IFTA simplifies the reporting of fuel use taxes across multiple jurisdictions, ensuring trucking businesses remain compliant while saving time and reducing paperwork.
This beginner’s guide will walk you through the basics of IFTA reporting, including how to register, what’s required for reporting, and when to submit your filings.
What Is IFTA and Who Needs It?
The International Fuel Tax Agreement (IFTA) is an agreement among the 48 contiguous U.S. states and 10 Canadian provinces. It streamlines the collection and distribution of fuel taxes for motor carriers that operate across multiple jurisdictions.
Who Needs to Register for IFTA?
You must register for IFTA if your vehicle:
Has two axles and a gross vehicle weight (GVW) of over 26,000 pounds, or
Has three or more axles, or
Is used in combination and exceeds a GVW of 26,000 pounds.
If your trucking business meets these criteria and operates in at least two jurisdictions, you’re required to file IFTA reports.
How to Register for IFTA
Determine Your Base Jurisdiction
Your base jurisdiction is the state or province where your business is registered, and where your fleet is primarily based and operated.
Apply for an IFTA License
Contact your base jurisdiction’s Department of Transportation (DOT) or Motor Carrier Office to apply. You’ll typically need:
Your USDOT number.
Proof of business registration and jurisdiction residency.
Vehicle information, including VINs.
Payment for the application fee (varies by jurisdiction).
Receive Your IFTA Credentials
Once approved, you’ll receive:
An IFTA license, which must be kept in the cab of each qualified vehicle.
IFTA decals, which must be affixed to both sides of each qualified vehicle.
Please note that many jurisdictions require trucking businesses to establish their International Registration Plan and receive their Apportioned License Plate before issuing IFTA credentials. Read more about registering for IRP here.
How to Report IFTA
To file an IFTA report, you need to track key data for each vehicle in your fleet. This includes:
Miles Driven in Each Jurisdiction
Record the total miles traveled in every state or province, whether loaded or empty. A GPS tracking system or an electronic logging device (ELD) can make this process much easier.
Gallons of Fuel Purchased and Used
Keep detailed records of all fuel purchases, including:
Date of purchase.
Number of gallons purchased.
Price per gallon.
Name and location (jurisdiction) of the fuel station.
Calculate Fuel Taxes
Your IFTA report will calculate:
Taxes owed in jurisdictions where you consumed more fuel than you purchased.
Refunds in jurisdictions where you purchased more fuel than you consumed.
The Definitive All-in-One Trucking Business Spreadsheet can streamline this process with its built-in IFTA calculator, helping you quickly input your mileage and fuel data to generate accurate tax calculations. It’s an essential tool for any trucking business owner looking to save time and stay compliant. Check it out here!
When to Report IFTA
IFTA reports are due quarterly, covering the following periods:
Q1 (January – March): Due April 30.
Q2 (April – June): Due July 31.
Q3 (July – September): Due October 31.
Q4 (October – December): Due January 31 of the following year.
It’s crucial to submit your report and pay any taxes owed on time to avoid penalties or fines. You still have to report miles and gallons purchased even if it’s zero!
Tips for Successful IFTA Reporting
Maintain Accurate Records
Proper record-keeping is critical for accurate reporting. Use technology like ELDs and our Trucking Business Spreadsheet to maintain records with ease.
Review Reports Before Filing
Double-check your entries for errors or inconsistencies. Small mistakes can lead to fines or audits.
Stay Organized Year-Round
Don’t wait until the end of the quarter to gather your data. Keeping up with record-keeping month by month (or even day by day) saves time and ensures accuracy.
Use Tools to Simplify Reporting
The Definitive All-in-One Trucking Business Spreadsheet is a game-changer. Not only does it include an IFTA calculator, but it also helps you track revenue, expenses, mileage, customer information, and other key metrics, all in one place.
What Happens If You Don’t File?
Failing to file your IFTA report or pay taxes on time can result in:
Late fees and penalties.
Suspension of your IFTA license.
Possible audits by your base jurisdiction.
IFTA reporting doesn’t have to be overwhelming. By understanding how to register, track, and report fuel usage and mileage, you can ensure your trucking business stays compliant and avoids unnecessary penalties. Tools like the Definitive All-in-One Trucking Business Spreadsheet can make the process much easier and more efficient, giving you more time to focus on running your business.
If you’re just getting started or need additional resources, check out our Trucking Startup Fundamentals course to set your business up for success!
Start your trucking business off the right way! Learn more about our new book, How to Start, Drive, and Accelerate a Trucking Business.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.
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