Everyone in the trucking industry has already heard about IFTA. This agreement saves a lot of time for drivers and helps fleets remain in compliance. But what is IFTA exactly, and how does it affect your trucking business? In this text, we will help you better understand IFTA, how it works, and how LionEight ELD can simplify the whole process.
What is IFTA?
IFTA, or International Fuel Tax Agreement, is an agreement between 48 U.S. states and the 10 Canadian provinces that allows inter-jurisdictional carriers to report and pay taxes for fuel using a single fuel tax license. IFTA helps trucking companies to cut skyrocketing administrative costs every year.
International Fuel Tax Agreement greatly simplifies how truckers and trucking companies pay their fuel taxes. Prior to this agreement, paying fuel taxes was a time-consuming process that required truckers to buy a permit at a port of entry.
IFTA made the reporting of the fuel use process much more efficient. Per the agreement, carriers operating in IFTA jurisdictions must submit only a single fuel tax form reflecting their inter-jurisdictional fuel use to their home state. Even when a carrier has fleet vehicles operating in multiple jurisdictions, they report their fuel use this way.
How does IFTA work?
Drivers are required to track how much fuel they use and how far they drive in each jurisdiction. The company reports this information quarterly, and member jurisdictions share the tax revenue accordingly. This agreement is beneficial to everyone involved. It saves time and money for fleet owners and ensures that member jurisdictions can maintain roads used by heavy commercial vehicles.
An IFTA report should be sent every quarter. This report should contain the total miles driven in all jurisdictions and all relevant trip information. In addition, you should also keep fuel receipts from the state or province where you purchased it. Remember, accurate and reliable distance accounting is extremely important to prevent an IFTA audit.
Who Needs IFTA?
Not every vehicle is IFTA qualified. International Fuel Tax Agreement defines a qualified motor vehicle as a vehicle built and used to transport property or people. These motor vehicles must be with three or more axles or two axles and a gross weight of over 26,000 pounds.
Additionally, these vehicles must operate in at least two states of the U.S. and/or Canadian provinces which are members of the International Fuel Tax Agreement. As we have mentioned, 48 contiguous states of the U.S. and all 10 provinces of Canada are members of the agreement. Alaska, Hawaii, and the District of Columbia are not members.
IFTA Quarters
To avoid penalties, you need to send your IFTA every quarter. Check the deadlines:
- Q1: April 30
- Q2: July 31
- Q3: October 31
- Q4: January 31
In case you need help with reporting, LionEight is here for you.
Simplify IFTA with LionEight ELD
It can be difficult to accurately track every mile a vehicle travels in each jurisdiction. In addition, manually recording odometer readings when truckers cross state lines can be pretty unreliable. Not only that, but uploading fuel purchases for hundreds of vehicles is time-consuming and risks manual errors.
However, with LionEight ELD, fuel tax reporting is a breeze. Here are the top 3 reasons why you should automatize IFTA with LionEight:
1. Simplified Fuel Tax Reporting
LionEight automates the calculation process for you. We keep all the necessary data for IFTA reports with our ELD devices, which eliminates human errors and ensures accurate reporting.
2. AI-Based IFTA Calculation
Be sure the IFTA report calculates miles traveled during the unplugged event on the ELD device. The unplugged miles are added to the total distance and distance traveled in each state with our AI calculation solution.
3. Save Days of Administrative Work
Fleet managers can now save several days of administrative work per month with automated IFTA reports. With LionEight ELD, you will have accurate and reliable IFTA reports in just a few clicks, no matter the number of vehicles in your fleet.
Final Word
International Fuel Tax Agreement is an important part of fleet compliance, along with the ELD mandate and Hours of Service management. Thankfully, this whole process can be simplified by using a fleet management solution to report on accurate GPS location and time in each location of fleet vehicles. As you are probably aware, paper records leave a lot of room for mistakes, such as missing paperwork, entry error, late fillings, etc.
Make IFTA reporting easier – contact our sales team instantly and get rid of the administrative burden right now.
What is IFTA?
The International Fuel Tax Agreement (IFTA) is a pact between the lower contiguous 48 states and the 10 Canadian provinces. This agreement allows inter-jurisdictional commercial motor carriers to use a single fuel tax license to report and pay fuel tax.
Why is IFTA important?
IFTA is important because it helps fleets stay compliant while saving everyone a great deal of time, money, and paperwork. In addition, the taxes are collected and paid so the states can use this money to improve highway conditions.
Which states are not included in the IFTA?
Alaska, Hawaii, and the District of Columbia are not included in the International Fuel Tax Agreement.
Who is IFTA qualified?
Commercial vehicles with three or more axles, or two axles and a gross weight over 26,000 pounds, used to transport goods or passengers are IFTA qualified.
Can LionEight help with IFTA reports?
Absolutely. LionEight ELD simplifies the whole IFTA reporting process. It automates the calculation process, saves time, and offers reliable and accurate data regarding the miles driven.