How to File Your Quarterly IFTA Tax Return

The International Fuel Tax Agreement (IFTA) is a cooperative agreement among the lower 48 U.S. states and the 10 Canadian provinces. It simplifies reporting and payment of fuel use taxes for motor carriers operating across multiple jurisdictions. Before IFTA, carriers needed individual fuel tax permits for each state or province.

IFTA streamlines this by allowing eligible carriers to obtain a single license from their base jurisdiction. This license allows travel through all IFTA member jurisdictions while reporting fuel usage and mileage. The agreement ensures fuel taxes are distributed among jurisdictions where fuel is consumed. Quarterly filing is required for IFTA licensees to account for and redistribute these taxes.

Understanding IFTA Filing Obligations

Motor carriers operating qualified motor vehicles across two or more IFTA member jurisdictions are subject to IFTA regulations. A “qualified motor vehicle” is a vehicle used for transporting persons or property that meets specific criteria. This includes vehicles with three or more axles, regardless of weight, or two axles with a gross vehicle weight (GVW) or registered GVW exceeding 26,000 pounds. Vehicles used in combination with a combined weight over 26,000 pounds also qualify.

IFTA licensees must file a fuel tax report every quarter. The standard quarterly periods are January 1 to March 31, April 1 to June 30, July 1 to September 30, and October 1 to December 31.

The general deadline for submitting each quarterly IFTA return is the last day of the month following the end of the quarter. For example, the report for the first quarter (January-March) is due by April 30. If a deadline falls on a weekend or holiday, the due date typically shifts to the next business day. Failure to file by the deadline can result in penalties and interest charges.

Preparing Your IFTA Tax Data

Preparing an IFTA return requires accurate and complete data collection. Two types of information are necessary: total miles traveled and total fuel purchased in each jurisdiction. This data must be tracked throughout the quarter.

Mileage logs record distance traveled within each state or province. These logs can be generated through various methods, including manual odometer readings at jurisdictional borders, GPS tracking devices that automatically record mileage, or detailed trip sheets that document routes and distances. Records should clearly indicate the date, vehicle identification, and miles driven in each specific jurisdiction.

Fuel receipts serve as proof of fuel purchases. Each receipt should contain specific information, such as the date of purchase, the name and address of the seller, the type of fuel (e.g., diesel, gasoline), the quantity of fuel purchased in gallons, and the price per gallon or total cost. Organizing receipts by jurisdiction and date streamlines data entry. Maintaining detailed records prevents discrepancies and supports accurate tax calculation.

Calculating Your IFTA Tax Liability

After preparing mileage and fuel purchase data, calculate the IFTA tax liability or potential refund. This involves determining the net taxable gallons for each jurisdiction and applying their fuel tax rates. Each jurisdiction has its own fuel tax rate, which varies by fuel type.

To calculate net taxable gallons for a jurisdiction, first determine total fuel consumed there. This is done by dividing miles traveled in that jurisdiction by the vehicle’s average miles per gallon (MPG) for the quarter. From this consumption, subtract total gallons of fuel purchased within that same jurisdiction. A positive result indicates tax owed to that jurisdiction. A negative result represents a credit for fuel tax already paid, which can be applied against taxes owed elsewhere.

Once net taxable gallons are determined, multiply this figure by the jurisdiction’s specific fuel tax rate for the fuel type used. This yields the tax due or credit for each jurisdiction. All tax due amounts and credit amounts from every jurisdiction are then summed to arrive at the total net tax liability or refund for the quarter. This ensures fuel taxes are allocated based on where fuel was consumed versus purchased.

Submitting Your Quarterly IFTA Return

After gathering data and completing calculations, submit the quarterly IFTA return. The primary methods for filing include online portals or mail-in options, each with its own procedures. Most jurisdictions offer an online filing system, which often provides a user-friendly interface to input the calculated totals for miles traveled and fuel purchased per jurisdiction.

When using an online portal, carriers usually log into their account, navigate to the IFTA filing section, and enter summarized data from their prepared calculations. The system often performs immediate checks for common errors and provides a summary for review before final submission. For those preferring physical submission, paper forms can be downloaded from the respective jurisdiction’s motor carrier or tax authority website, completed manually, and then mailed to the designated address.

Payment procedures vary depending on whether tax is due or a refund is expected. If a net tax is owed, online payment options, such as electronic funds transfer (EFT) or credit card payments, are commonly available through the filing portal. Alternatively, a check or money order can be mailed along with the paper return. If a refund is due, the jurisdiction will typically process it and issue a direct deposit or check, though the timeline for receiving refunds can vary. Timely submission, regardless of method, is important to avoid penalties and maintain good standing with IFTA.

Essential Record Keeping for IFTA Compliance

Maintaining organized records is important for IFTA compliance. These records support information reported on each IFTA return and demonstrate adherence to regulations during audits. Records that must be retained include:
Mileage logs
Fuel purchase receipts
Copies of all submitted IFTA tax returns
Supporting documentation related to fuel consumption or mileage

These documents provide a verifiable trail for reported activities and calculations. Mileage logs allow auditors to trace vehicle movements and confirm reported distances. Fuel receipts validate the quantity of fuel purchased and taxes paid.

IFTA regulations require carriers to retain these records for a period, often four years from the return’s due date or filing date, whichever is later. Some jurisdictions may have longer retention requirements, so confirm the period with your base jurisdiction. Organized record-keeping simplifies audits, allowing carriers to retrieve information and substantiate filings, preventing potential assessments or penalties.