How to File Quarterly IFTA Taxes in Texas

The International Fuel Tax Agreement (IFTA) is a cooperative agreement among U.S. states and Canadian provinces. It simplifies fuel tax reporting and payment for interstate motor carriers by allowing them to report fuel use and pay taxes to a single base jurisdiction. This framework eliminates the need for individual permits or filings in each state or province a vehicle travels through, significantly reducing administrative burden. This article guides Texas-based carriers through the quarterly IFTA filing process, covering requirements, data preparation, filing procedures, and post-filing responsibilities.

Understanding IFTA Requirements in Texas

The Texas Comptroller of Public Accounts is the agency responsible for administering IFTA for carriers based in Texas. Businesses operating qualified motor vehicles across state or provincial lines must obtain an IFTA license through this office. A “qualified motor vehicle” is generally defined as a motor vehicle used to transport persons or property that has three or more axles, regardless of weight, or has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds (11,797 kilograms). Vehicles used in combination with a trailer are also considered qualified if the combined gross vehicle weight exceeds 26,000 pounds.

To obtain an IFTA license in Texas, motor carriers are encouraged to apply electronically through the Comptroller’s Webfile system. This online application process is generally quicker than mailing in a paper application. Once the application is approved, the IFTA license and two decals for each qualified motor vehicle are issued and mailed. Each vehicle must carry a copy of the license in its cab, and the decals must be displayed on both sides of the vehicle’s exterior.

IFTA tax reports are due quarterly, with specific deadlines following the end of each calendar quarter. The reporting periods and their corresponding due dates are:
January 1 to March 31 (due April 30)
April 1 to June 30 (due July 31)
July 1 to September 30 (due October 31)
October 1 to December 31 (due January 31 of the following year)

If a due date falls on a weekend or public holiday, the deadline is extended to the next business day. Failure to file or pay by the due date can result in penalties, typically a minimum of $50 or 10% of the net tax liability, whichever is greater, along with accrued interest on any overdue taxes. Even if there was no operation during a quarter, a “zero miles” report must still be filed to maintain compliance.

Preparing Your IFTA Tax Data

Accurate and comprehensive record-keeping is fundamental to IFTA compliance. Motor carriers must maintain detailed records for each qualified motor vehicle for every quarter. These records are essential for calculating fuel consumption and mileage within each jurisdiction and are subject to audit.

Specific types of records required include jurisdiction-by-jurisdiction mileage logs. These logs must document the date of travel, the origin and destination of each trip, the routes taken, and odometer readings at the beginning and end of each trip, especially when crossing jurisdictional borders. The total miles traveled within each jurisdiction must be clearly recorded. Methods for tracking mileage can include manual logs, electronic logging devices (ELDs), or GPS tracking systems. ELDs often provide the necessary detail for IFTA reporting, with data points like GPS readings and corresponding odometer readings important for validating travel distances.

Fuel purchase records are equally important. For every fuel purchase, carriers must retain original receipts or invoices that include the date of purchase, the seller’s name and address, the number of gallons purchased, the type of fuel, and the price per gallon or total cost. It is also advisable to include the vehicle unit number on the receipt. These receipts serve as proof of tax-paid fuel purchases, which are necessary to claim appropriate credits on the IFTA return.

Once all mileage and fuel data have been collected, organizing this information systematically is the next step. This involves summarizing the total miles traveled and total fuel purchased for each qualified motor vehicle within each IFTA jurisdiction for the reporting quarter. This organized data then facilitates the calculation of your IFTA tax liability or refund.

To calculate the IFTA tax, determine the total miles traveled and total gallons of fuel purchased for each jurisdiction. The IFTA tax rates, which vary by jurisdiction and change periodically, can typically be found on the IFTA, Inc. website or the Texas Comptroller’s website. The net tax due or credit for each jurisdiction is calculated by multiplying the taxable gallons consumed in that jurisdiction by its specific fuel tax rate. Calculating the fleet’s average miles per gallon (MPG) helps verify the consistency of mileage and fuel data.

Filing Your Texas IFTA Return

With all necessary data prepared and calculations completed, submit your IFTA return to the Texas Comptroller of Public Accounts. The primary and most efficient method for filing your Texas IFTA return is through the Comptroller’s Webfile system. This online portal provides a streamlined process for electronic submission.

To begin, access the Texas Comptroller’s eSystems portal and log in using your taxpayer ID and PIN. This grants entry to a secure online environment where various tax filings can be managed. Within the Webfile system, navigate to the IFTA return section, typically identified by the relevant reporting period.

The Webfile interface will guide you through entering the pre-calculated mileage and fuel data for each jurisdiction. This involves inputting the summarized totals for miles traveled and gallons purchased into the designated fields on the electronic form. After all data has been accurately entered, the system will often provide a summary of the return, allowing for a final review to confirm its correctness before submission. Upon successful electronic submission, a digital confirmation or receipt is typically generated, which should be saved for your records.

While online filing through Webfile is highly encouraged for its efficiency and ease, paper filing options may be available for certain situations. In such cases, carriers would complete and mail forms. However, the electronic method is generally preferred due to faster processing and immediate confirmation of submission.

Post-Filing IFTA Responsibilities

After successfully filing your IFTA return, several ongoing responsibilities ensure continued compliance. If your return indicates a tax due, prompt payment is required. The Texas Comptroller’s office offers various payment methods, including online options through Webfile, electronic funds transfer (EFT) via TEXNET, or traditional mail-in checks. Online payments can often be made directly after submitting the return, providing a convenient and secure way to fulfill your tax obligations.

Maintaining comprehensive records extends beyond the filing date. IFTA regulations mandate that all supporting documentation, including mileage logs, fuel receipts, and copies of filed tax returns, be retained for four years from the due date of the return or the date it was filed, whichever is later. These records serve as evidence in the event of an audit, demonstrating the accuracy and completeness of your filed returns.

IFTA audits are a regular part of compliance enforcement, with jurisdictions required to audit a percentage of their accounts annually. If selected for an audit, you will typically receive a notification letter from your base jurisdiction, often with a 30-day notice. The audit process involves a review of your submitted records to verify the accuracy of reported mileage and fuel consumption. Auditors will examine your record-keeping practices and compare your reported data against your supporting documentation. Organized and accessible records help navigate an audit smoothly.

Should an error be discovered on a previously filed IFTA return, it is possible to amend it. The process for amending a return involves completing a corrected version of the original tax form. You will need to indicate that it is an amended return and provide the revised figures along with explanations for the changes. The Texas Comptroller’s Webfile system allows for the electronic submission of amended returns, helping carriers correct inaccuracies.