How to File Your IFTA Fuel Tax Return

The International Fuel Tax Agreement (IFTA) streamlines fuel tax reporting for motor carriers operating across multiple jurisdictions within the United States and Canada. This agreement simplifies compliance by allowing carriers to report and pay fuel taxes to a single base jurisdiction, rather than filing separate returns with each jurisdiction traveled. IFTA promotes efficient interstate and inter-province commerce by reducing the administrative burden on trucking companies. It ensures that fuel taxes are equitably distributed among jurisdictions based on where the fuel is consumed. Compliance with IFTA is a standard expectation for qualified motor vehicles engaged in commercial activities.

Information Needed for Your IFTA Return

Preparing an IFTA fuel tax return requires accurate record-keeping. Motor carriers must track all miles traveled by qualified vehicles during the reporting period. This includes gathering total mileage for each vehicle, typically obtained from odometer readings or electronic logging devices (ELDs).

Beyond total miles, mileage must be broken down by each jurisdiction traversed. Accurate records detailing the miles driven within each state or province are important for calculating the tax liability or refund. GPS data or detailed trip reports serve as reliable sources for this jurisdictional mileage breakdown.

Tracking all fuel purchases is also required. For each purchase of taxable fuel, records must include the date of purchase, the location (city and state/province), the number of gallons or liters purchased, and the cost per unit. Original fuel receipts must be maintained as proof of purchase.

Some fuel purchases may qualify for tax exemptions or refunds, such as fuel used for power take-off (PTO) units or auxiliary equipment. Carriers must separately track these specific fuel usages and maintain supporting documentation to justify any claimed exemptions or refunds.

Any overpayments or credits from previous IFTA reporting periods must also be accounted for when preparing the current return. These amounts reduce the current tax liability or increase a potential refund.

The primary records supporting an IFTA return typically include trip reports, detailed mileage logs, and all fuel receipts. Current IFTA fuel tax rates for each jurisdiction are publicly available, often found on the IFTA, Inc. website or the specific tax authority website of the base jurisdiction.

Steps for Completing and Submitting Your IFTA Return

Once all necessary information has been gathered, completing the IFTA return involves transferring this data onto the form. The general structure of an IFTA return typically begins with reporting total miles traveled by all qualified vehicles, followed by a detailed breakdown of miles driven in each specific jurisdiction. Carriers then input their total fuel purchases, also categorized by jurisdiction. Blank IFTA return forms are accessible through the motor carrier’s base jurisdiction’s tax authority website.

Most jurisdictions encourage or require online filing of IFTA returns. To file online, carriers typically log into a secure online portal provided by their base jurisdiction’s tax agency. They then enter the gathered mileage and fuel data directly into the electronic form fields.

For jurisdictions that still permit it, a paper return can be printed, manually completed, signed, and then mailed to the appropriate tax authority. A copy of the submitted return should be retained.

Payment of any calculated tax liability is typically facilitated through electronic funds transfer (EFT) or via online payment portals offered by the tax authority. Some jurisdictions may also accept mailed checks. Upon successful online submission, a confirmation number or digital receipt is usually provided.

Key Compliance Requirements

Adhering to specific deadlines is an important aspect of IFTA compliance. Fuel tax returns must be filed quarterly, with consistent due dates throughout the year. The first quarter (January 1 to March 31) is due by April 30. The second quarter (April 1 to June 30) is due by July 31.

The third quarter (July 1 to September 30) has a filing deadline of October 31. The fourth quarter (October 1 to December 31) must be filed by January 31 of the following year. Timely submission is required.

Motor carriers must retain all records supporting their IFTA filings. This record retention requirement typically extends for four years from the due date of the return or the date the return was filed, whichever is later.

IFTA filings are subject to audit by the base jurisdiction’s tax authority. The purpose of an audit is to verify the accuracy of the reported mileage and fuel purchases against the maintained records. Carriers must be prepared to provide all supporting documentation upon request during an audit.

Failure to comply with IFTA regulations can result in various penalties. These may include interest charges on any unpaid tax amounts, which can accrue from the due date until the payment is received. Monetary penalties may also be assessed for late filing or late payment, often calculated as a percentage of the unpaid tax or a fixed amount, generally ranging from $50 to 10% of the net tax due, whichever is greater.