How to Prepare and File Your IFTA Report

The International Fuel Tax Agreement (IFTA) is a cooperative arrangement established between U.S. states and Canadian provinces. It was implemented to streamline the reporting and payment of fuel taxes for motor carriers operating in multiple jurisdictions. The primary purpose of IFTA is to ensure that fuel taxes are appropriately paid to the jurisdictions where fuel is consumed, rather than solely where it is purchased. This system simplifies the administrative burden for trucking companies, allowing them to file a single quarterly fuel tax report with their base jurisdiction. It also helps prevent the issue of double taxation on fuel used across different states and provinces.

Understanding IFTA Reporting Requirements

A “qualified motor vehicle” is generally defined as a vehicle with three or more axles, or a vehicle with two axles that has a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds. These vehicles must travel between two or more IFTA member jurisdictions to be subject to the agreement. The core information required for IFTA reporting includes the total miles traveled in each jurisdiction and the total gallons of fuel purchased in each jurisdiction.

IFTA reports are filed quarterly, with specific due dates to ensure timely compliance. The reporting periods and their respective deadlines 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)
If a due date falls on a weekend or public holiday, the deadline is typically extended to the next business day. Even if a qualified motor vehicle has no operations or mileage during a quarter, a “zero” report must still be filed to maintain compliance.

Collecting and Preparing IFTA Data

Accurate data collection is fundamental for proper IFTA reporting and audit preparedness. For tracking mileage, motor carriers can utilize various methods such as GPS tracking systems, electronic logging devices (ELDs), or traditional manual trip sheets and logbooks. GPS and ELD systems offer automated and highly accurate recording of distances traveled in each state or province, often syncing with odometer readings. When using manual methods, it is important to record precise odometer readings at the beginning and end of each trip, and especially when entering or exiting each jurisdiction.

For fuel purchases, retain all fuel receipts. Each receipt should show:
Date of purchase
Location (city and state or province)
Gallons or liters purchased
Type of fuel
Price per unit or total cost
These receipts serve as proof of tax-paid purchases for receiving credit for taxes already paid at the pump. Organizing this data efficiently, whether through spreadsheets or specialized IFTA software, helps streamline the reporting process and ensures verifiable records are available for potential audits. Records supporting IFTA returns must be maintained for a period of four years from the return’s due date or filing date, whichever is later.

Calculating and Completing Your IFTA Report

Once mileage and fuel purchase data are collected, perform the necessary calculations to complete the IFTA report. Determine the total miles traveled and total gallons of fuel purchased in each jurisdiction from your records. A fleet’s overall miles per gallon (MPG) is calculated by dividing the total miles driven across all jurisdictions by the total fuel consumed. This fleet MPG is used for tax determination.

Taxable gallons for each jurisdiction are calculated by dividing the miles traveled in that jurisdiction by the fleet’s MPG. To determine the tax due or credit for each jurisdiction, the calculated taxable gallons are multiplied by that jurisdiction’s fuel tax rate. Subtract any taxes already paid at the pump in a given jurisdiction to arrive at the net tax liability or credit. These calculated figures are used to populate the official IFTA tax forms, provided by the base state’s tax agency. These forms include entries for total miles, total fuel, and the net tax or credit amount for each jurisdiction.

Filing Your IFTA Report

After completing the calculations and populating the IFTA report forms, submit the report to the base state. Submission methods include online portals provided by the base state’s tax agency or mailing physical forms. Jurisdictions encourage or require electronic filing. Online submission involves logging into a secure portal and either manually entering data from the completed forms or uploading a prepared file.

Any tax due can be paid through various methods, such as electronic funds transfer (EFT), credit card, or check. Adhere to the quarterly deadlines to avoid penalties. Late filing can result in a penalty of at least $50 or 10% of the net tax liability, whichever amount is greater, along with interest on any delinquent taxes. After submission, motor carriers receive confirmation of their filing, and the base jurisdiction handles the distribution of taxes to other member jurisdictions.