IFTA Fuel Tax Report – a simplified procedure that allows carriers operating in multiple jurisdictions to register and report quarterly for only one state.
Table of Contents
- Filing IFTA Fuel Tax Reports
- How to Fill Out IFTA Fuel Tax Report?
- Getting Help with IFTA: Making Life Easier for Your Business
Filing IFTA Fuel Tax Reports
What is IFTA reporting? This refers to the IFTA fuel tax report that needs to be filled out and filed on a quarterly basis. The deadlines for each filing are as follows:
- April 30th for the 1st quarter of any given year, or the period between January and March
- July 31st for the 2nd quarter of the year, or the period between April and June
- October 31st for the 3rd quarter of the year, or the period between July and September
- January 31st for the 4th quarter of the previous year, or the period between October and December
Pay attention to these deadlines as late payment fees are applied to missed filing dates
How to Fill Out IFTA Fuel Tax Report?
The IFTA has added a great deal of efficiency and ease to the process of interstate, and even international, trucking. However, the IFTA fuel tax report process can still seem a little cumbersome and confusing, particularly when longer and more complex journeys are required across many different jurisdictions and borders.
What are IFTA reporting requirements? The process of tracking and completing your Fuel Tax Reports under the International Fuel Tax Agreement is as follows.
- Total Your Fuel Purchases
During the driver’s journey, they will need to purchase fuel to keep their vehicle on the road. As this fuel is taxed, they will need to keep a record of such purchases as well. The record will include:
- The date on which the fuel was purchased
- The name of the vendor and their location
- Details of the fuel type – diesel, for example
- The registration plate number of the vehicle
- The amount of fuel purchased in gallons
- The price of each gallon, as implemented by the fuel vendor at the location
- The name of the driver
The driver will also need to keep hold of all receipts for fuel purchases. These serve as proof of purchase and of payment for the fuel that is consumed as you calculate IFTA miles.
- Apply the Appropriate Tax Rates
Now that you know how much fuel you purchased in each jurisdiction, you can apply the appropriate trucking fuel tax rate for each section of the journey. The International Fuel Tax Association website provides the latest tax rates for each state and province by the agreement. These rates change on a regular basis, so it is wise to refrain from calculating your rates until the tax is due to be paid at the end of each quarter.
- Calculate the Tax Balance Due
Simply subtract the tax you have paid in each state or province from the total tax due in that jurisdiction. This will give you a value for the remaining tax balance that is due in that particular location.
The receipt you receive when you pay for your fuel will have details of the fuel tax that has already been covered in the transaction. Keep hold of these receipts and then use these values to arrive at the tax balance due. You may need the original copies of the receipts to provide proof of tax paid.
Additional Elements to Be Aware Of
There are other factors involved in the calculation of tax. After subtracting the paid tax from the required tax, you have a raw total, but these elements can contribute to or reduce the total amount of tax you need to pay.
- In some jurisdictions, not all miles are taxable. But what are non-IFTA miles exactly? One example involves driving to a location in order to deal with an issue with your fuel permit. In this case, some jurisdictions will not apply tax to the fuel consumed on this part of the journey.
- Surcharges apply in some jurisdictions. If you are traveling through one of the IFTA surtax states, be sure your drivers only purchase the amount of fuel necessary to complete this portion of the journey.
Keeping Your Fuel Tax Low
The above steps help you to work out the tax due for each journey, and they provide you with some of the information you need to report. However, there are additional steps you can take to help you keep on top of your fleet’s fuel consumption. This is a crucial part of fleet management as faulty vehicles and inefficient driving habits can see you paying well over the odds for your fuel tax. You need to be able to recognize these inefficiencies in a swift and timely manner.
Keep a Record of the Amount of Miles Traveled Across Each Jurisdiction
In order to save on administrative tasks, drivers are able to pay fuel tax together in one lump sum under the IFTA rules. However, the compromise is that drivers must keep track of the amount of miles traveled in each applicable jurisdiction. Provided that the journey is well planned and that the vehicle’s instruments are working, this should not be a problem.
Total Your Fuel Consumption in Each State
The total fuel consumption for each state is derived using two simple formulae. First, divide the total gallons of fuel used by the total miles traveled. This provides the miles per gallon, or MPG, across the whole journey.
The MPG should be recorded to two decimal places and can be rounded off to the nearest two decimal place value.
Divide the total miles driven in each state or province by this MPG value to arrive at a value for fuel consumed in each state.
Complete this second formula for each state or province entered during the reporting period.
Getting Help with IFTA: Making Life Easier for Your Business
Many business owners and drivers are still unsure about how to do IFTA quarterly reports. While the IFTA does make life much easier and saves serious money for operators and drivers, there is still a lot of work involved as entities calculate IFTA tax and submit the right reports.
It is also worth noting that the stakes are high for businesses. If logistics businesses and trucking companies do not properly calculate and report their taxable fuel consumption, this can lead to overpayment of tax at best or a strict penalty at worst.
So, what is the answer? How to file IFTA taxes in accordance with the applicable laws and regulations? This is where Logity Dispatch can help.
We help you fill out your IFTA quarterly reports and fix any problems. Our expert team can use your information to calculate the tax you have to pay, as well as any non-taxable miles you can use to reduce your tax bill. We can also help you fill out IFTA tax forms and submit these reports on time and in an accurate manner.
To learn more about this service or to enjoy the advantages that Logity Dispatch can offer to you and your fleet, reach out to our team today. We are ready and waiting to help you get to grips with IFTA reporting and to assist you as you make your fleet more profitable and more efficient.
