Most people, especially business owners, get uneasy when they think of taxes. With taxes come many rules and regulations that can be difficult to follow. That’s why we are here to help you with your International Fuel Tax Agreement (IFTA) registration.
This registration can be complicated, and hence we are here to provide you all the information you need to focus on growing your business starting with IFTA. Helping your business succeed is important to usand that requires understanding your role and responsibility as a fleet vehicles business owner.
For the newbies who don’t know what IFTA is, it is a cooperative program to collect and distribute fuel tax revenue between member states of U.S.A and Canadian provinces.
A clear understanding of IFTA requirements can help increase awareness of total business activity with taxes. All vehicles used to transport people or property must apply for an IFTA license if they meet certain conditions.
For trucking companies and owners operating across IFTA jurisdictions, the hassle of reporting fuel tax via paperwork is reduced significantly. The compliance requirements are also minimized drastically.
To help you better understand the tax and licensing obligations of IFTA we have created this guide to a smooth registration:
Who Needs To Register For IFTA?
Under the International Fuel Tax Agreement (IFTA), registration is compulsory for all the qualified vehicles. The following qualified motor vehicles used to transport people or property will require IFTA registration:
• Have 3+ axles
• Have 2 axles and the registered vehicle weighing more than 11,797 kgs
• Are used in a combination that has a combined vehicle weight of more than 11,797 kgs.
How Do You Get Registered For IFTA?
You can use electronic, mail, or walk-in method to get registered for IFTA. Your electronic application is considered 'received' the date it is submitted. In the case of walk-ins, the application is considered received by the postmark date on the envelope.
Which Are The Reporting Quarters?
• Quarter 1 (Jan. – March): April 30
• Quarter 2 (April – June): July 31
• Quarter 3 (July – Sept): Oct. 31
• Quarter 4 (Oct. – Dec): Jan. 31
Documents Required For IFTA
Each year your base jurisdiction must be sending you a reminder to file your IFTA, but the real challenge is to apply with ease and to store the license properly once obtained. All applicants must keep all the documents intact for a hassle-free experience. Smooth IFTA reporting requires detailed accuracy and timely alerts.
The following documents/Information is required to get yourself registered:
• All the fuel use records, either digital or hard copies
• An annual license for every vehicle that qualifies
• United States Department of Transportation (US DOT) number
• International Registration Plan (IRP) number
• If your business has a trade name known as a DBA (doing business as) name, that is different than its legal name, mention that as well.
• Telephone number of the business, including area code for the same
• Business mailing address
• Bulk fuel jurisdictions
• ACH debit payment details
• Social security number of all company officers and/or responsible parties
• Copy of the Power of Attorney
• If you operate any motor vehicle having a gross weight of more than 18,000 pounds, you must have a highway use tax permit and sticker for the vehicle.
• This application must be signed by the owner, partner, member, officer, or person authorized by a Power of Attorney assuming responsibility for the validity of the information filled in the application.
All the vehicles with active licenses are given two decals to display. You have to register a base state from where your vehicles operate, but with this single license, you will be given a set of decals that will allow you to operate through all member jurisdictions.
Also, you’ll need to provide receipts for fuel purchases along with your quarterly forms to receive a tax credit refund. If your IFTA is filed inaccurately or late, you might have to bear the penalties.
How To Register For An IFTA?
1. To register, go to the IFTS portal
2. Click on 'Register'
3. Step through the process and complete all fields
Subsequent IFTA Process
1. Submit the IFTA license application in the base jurisdiction
2. Base jurisdiction reviews and processes the license application
3. IFTA license received
4. A copy of the license must be placed in the vehicle
5. At the end of each quarter, file a quarterly IFTA tax return to the base jurisdiction for fuel used and remit the due amount
6. Review the base jurisdiction
7. A transmittal report is sent by the base jurisdiction to the other jurisdictions in which your vehicle has operated
8. You have to pay base jurisdiction what is owed, while the base jurisdiction pays other jurisdictions what they're owed and collects from other jurisdictions the due.
What Are The IFTA Exemptions?
There are certain exemptions offered to fuel tax reporting in IFTA. For instance, driving on certain specific private roads, on Native American reservations, or specific toll roads are considered exempted under IFTA.
If you operate only qualified motor vehicles that are exempt from the tax on fuel use in New York State, you are not required to register for a New York State IFTA license to operate in the state.
However, if you operate one or more vehicles in another IFTA jurisdiction, where they have fuel tax jurisdiction, you must get a New York State IFTA license and decals for such vehicles to operate.
Recreational vehicles and vehicles owned and operated by the United States Government and subsidiaries under IFTA are exempt from fuel tax licensing by West Virginia. Different regions have different exemptions for vehicles.
The IFTA exemption table is an important reference you will need to understand this field applicability.
Many fleets find that the most efficient way to create accurate, detailed reports is by using a technology solution for the ease of tax compliance. These technology solutions also track IFTA data points for you by the jurisdiction. A fleet management software can make your business grow smoothly without hassle.
