IFTA Reporting
When trucking and transport companies need to move through and do business in more than one state and in Canada, it would paralyze business to have to calculate fuel taxes and to obtain permits for each and every one. The International Fuel Tax Agreement allows truckers to work under one license and to file one report to cover 48 U.S. states and all the Canadian provinces (territories are not members).
This dramatically increases the possibilities for drivers out in the field. Rather than undergoing lengthy and inefficient application processes in each state and province, drivers now have streamlined access to the whole of the continental United States and most of Canada, thanks to the IFTA tax report. The power to service the needs of clients, right across this vast area, is now directly in the hands of drivers.While more convenient than the way things were before, the process still has important reporting requirements that trucking companies cannot overlook.
How the Streamlined Process Works
Businesses with an IFTA license continue to buy fuel as usual but are “credited” with whatever fuel taxes they have paid. For every fiscal quarter (by the end of April, July, October, and January every year), they submit an IFTA fuel tax report, which lists how much they have traveled and how much fuel was purchased in every IFTA jurisdiction. The tax liabilities to each jurisdiction is set by applying a formula that incorporates the average fuel mileage. You end up with a list of what has been already paid to each member state/province, and whether you owe more or have overpaid. Your base jurisdiction (that is, where you got your carrier’s license) refunds you if you have overpaid and receives any amounts owing — then transfers funds to/from the other members. As you can see, the scheme relies heavily on the quarterly report that the carrier must submit.
Who Needs/Gets an IFTA License?
Do you need to file an IFTA fuel tax report and apply for the IFTA license? Not all vehicles are subject to this requirement, and most drivers can move between states and provinces with ease, without the need for additional licensing and reporting. The IFTA applies to commercial vehicles in specific classes or vehicles designated for particular use cases.
If your vehicle:
- is used to transport people or property
- has three or two axles as well as an actual or registered gross vehicle weight that exceeds 26,000 lbs. (11,797 kgs) — or if in combination the actual or registered gross vehicle weight is more than 26,000 lbs. (11,797 kgs)
Then it is qualified under the Act, and you must submit the IFTA quarterly fuel report.
Penalties
Failure to file the trip report, late filing, and underpaying can attract a penalty that works out to the greater of 10% of the amount owing or $50. Note that interest will be applied to the amount owing to each member jurisdiction.
Hawk Dispatch LLC IFTA Report Service
Since jurisdictions set their own rates, the system revolves around properly completed IFTA reports. Failure to follow the requirements not only has the potential to be quite costly to you if you owe fuel taxes in any member jurisdiction, but it can also affect the reputation of your business. For many trucking companies, even though you can complete and file a lot of the required paperwork and the report online, all of this tedious administrative stuff takes up valuable time the business would rather focus on actually driving and making money. That’s why Hawk Dispatch LLC is happy to take the IFTA reporting requirement off your hands.
This is what the IFTA Fuel Tax Reporting Service from Hawk Dispatch LLC is all about. We believe in making life easy for our clients and taking away many of the obstacles they face when they head out on the road. We understand that you love to drive and provide great results for your customers — this is the way you make your living. You didn’t get into truck driving because you love applying for permits and filing fuel tax reports.
Here’s what you can expect from our services.