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Rules of the Road: Understanding Motor Carrier Fuel Tax Filing Requirements
Foley
5 mins read

Our Rules of the Road articles will cover areas of the regulations that are frequently violated and offer advice about keeping in compliance .

The International Fuel Tax Agreement (IFTA) is a cooperative effort of the lower 48 states and 10 Canadian provinces to simplify fuel tax reporting and payment. Under the agreement, motor carriers operating IFTA-qualified vehicles register and submit quarterly fuel tax reports, along with any required payments, to their base jurisdiction. Before IFTA was launched, each state had its own system for collecting fuel taxes. Though still complex, fuel tax reporting under IFTA is less of a burden for both states and the trucking industry.

IFTA-Qualified Vehicles
Motor carriers who operate an IFTA-qualified motor vehicle in commerce between at least two member jurisdictions must participate in IFTA. A qualified motor vehicle is one used, designed or maintained to transport property or persons that is:

  • Three or more axles regardless of weight, or
  • Two axles with a gross vehicle weight over 26,000 pounds; or
  • Used in combination with a total gross vehicle weight over 26,000 pounds.

IFTA Base Jurisdiction
There are currently 58 IFTA jurisdictions – the 48 contiguous U.S. and 10 Canadian provinces. Under IFTA, a motor carrier’s base jurisdiction is the state or province:

  • Where its qualified motor vehicles are registered,
  • Where it maintains operational control and operational records of its qualified vehicles, and
  • That qualified motor vehicles travel in.

Motor carriers register and file their quarterly tax returns with their IFTA Base Jurisdiction, which makes the appropriate financial adjustments and distributes tax monies to the proper jurisdictions.

IFTA License and Decals
Motor carriers who operate IFTA-qualified vehicles must renew their IFTA licenses through their base jurisdiction each year. The original copy of the license must be stored in the office along with business records, and copies must be kept in all IFTA-qualified vehicles. Motor carriers must also display IFTA decals issued by their base jurisdiction on both sides of a vehicle’s cab.

Quarterly IFTA Fuel Tax Reports
In most jurisdictions, motor carriers are required to file fuel tax returns with their IFTA jurisdiction office each quarter. To avoid penalties, IFTA returns, along with any payment for taxes due, must be postmarked on or before the deadlines listed below.

  • Quarter 1: April 30
  • Quarter 2: July 31
  • Quarter 3: October 31
  • Quarter 4: January 31

Motor carriers must file a return even when no miles are traveled or no taxable fuel is used during a quarter.

IFTA Documentation Requirements
IFTA license holders must maintain detailed distance and fuel purchase records for all qualified motor vehicles. Specifically, motor carriers must prepare:

  • Detailed Trip Reports
  • Monthly Fleet Summaries
  • IFTA Trip Reports must include:
  • Date of trip (Start and End)
  • Trip origin and destination
  • Routes of travel
  • Beginning and ending odometer reading
  • Total trip distance
  • Distance by jurisdiction
  • Vehicle Identification Number
  • Vehicle Fleet Number
  • Registrant’s Name

Receipts documenting fuel purchases must include:

  • Date of the purchase
  • Seller’s name and address
  • Number of gallons purchased
  • Fuel type purchased
  • Price per gallon
  • Unit numbers of vehicle
  • Purchaser’s name.

IFTA Retention Requirements
Motor carriers must retain IFTA tax returns, along with trip reports, fuel receipts and other supporting documentation, for four years from the applicable due date.

Temporary Fuel Trip Permits
Motor carriers may opt to purchase temporary fuel trip permits, which allow a qualified vehicle without an IFTA license to travel through a state. These temporary permits vary by length and price and may be purchased from Foley Services..
As this approach is extremely costly, most operators of IFTA-qualified vehicles choose to get an IFTA license and file quarterly fuel tax returns.

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