If you are trucking across state lines, then filing your quarterly IFTA taxes can be a pain. Electronic Log Devices (ELD’s) can help tremendously to track miles driven in each state. However, how does a fleet manager keep track of fuel purchases when your vehicles may have purchased fuel in a variety of ways (at your bulk tank, from a mobile refueling truck or at a retail station using a fleet card)?
What is IFTA?
If you buy fuel in Kansas, as an example, then you pay fuel taxes to the state of Kansas for that purchase. The fuel tax is designed to cover the costs of maintaining the road. However, if after paying the state of Kansas their fuel tax to maintain the roads in Kansas and then drive over to Missouri with your load, then Missouri has an issue with you. You are creating wear and tear on their roads, and Kansas is getting all of the road money. For this purpose, IFTA was created.
IFTA is cooperative agreement between lower 48 US states and 10 provinces in Canada. The agreement enabled carriers who crossed jurisdictions to report and pay taxes for fuel their vehicles used in those jurisdictions using a single fuel tax license. It also allowed the good citizens of Missouri in our earlier example to be fairly compensated for heavy vehicles using their roads.
Who is Required to Have an IFTA License?
If you are a “qualified motor vehicle” who crosses jurisdictions, then IFTA applies to you. A qualified motor vehicle is:
- Any vehicle with two axles and a gross vehicle weight of over 11,797 kilograms or 26,000 pounds
- A vehicle of any weight but with three or more axles
- A vehicle that exceeds 11,797 kilograms or 26,000 pounds
You will need to apply for an IFTA license from your home state. Your vehicles should have IFTA decals for each state in which they will be driven.
Filing IFTA Reports
You will be required to file IFTA returns on a quarterly basis with your home state. The filing will need to show how many miles your fleet drove in each state. You will also need to report the amount of fuel purchased in each state. Applying the IFTA’s rates by state, you will be able calculate how much you owe each state.
Creating IFTA Efficiency
Filing your quarterly IFTA reports does not have to be overly burdensome. If you have electronic log device, then you can use that information to quickly and accurately report where your miles were spent. The more challenging part is automating fuel purchases.
Some IFTA software providers do have connections with fleet card processors. These work well if you are buying only at retail stations which, unfortunately, can be one of the most expensive ways to purchase fuel. If your vehicles get fuel from you bulk tank or mobile refueling, you can still enjoy the same efficiencies.
Diversified Energy Supply can capture data not only from our fleet fuel card, but we can also capture fueling transactions from the dispersal controller at your bulk tank and from the mobile refueling transactions. Our consolidated reporting will show you exactly where your fuel was purchased by vehicle regardless of how it is purchased. We can also transmit that data to your IFTA software provider so that your vehicles’ mileage data is matched with fueling events. Our data is stored securely in our secure data warehouse, so it is accessible to you when you need it and will meet IFTA’s record retention requirements.
Do not let IFTA compliance and the threat of fines overburden your business. Click “Let’s talk” on our website to schedule a time with one of our fuel professionals. We can help make sure that your business is compliant in an accurate and efficient manner.