IFTA Reporting and IFTA Filing Guide
We at TMS Digital offer among our suite of Transportation Software programs, a great program called IFTA Manager. Our IFTA Tax Calculator program imports from your trucks’ ELDs and from your fuel card, marry them together based on truck number and date, and creates trips for reporting purposes which tells us how IFTA works. In turn, this allows you to run those built-in IFTA reports to calculate your fuel MPG and determine your over/under miles and fuel purchases, based on the most current IFTA formulas for each state.
However, we have noticed in our sales department, that we get many inquiries wanting to know how IFTA works, how to get a permit a,nd how to report IFTA. We do the IFTA calculation app to give you the numbers you need for reporting. Because we like to be as helpful as we can, here are some of the most common questions about IFTA, answered.
If you own a qualified motor vehicle, it is required to file an IFTA report. You will receive an IFTA license as well as an IFTA decal for each qualified vehicle you run after you complete your filing. Whenever fuel is purchased, the amount is recorded in the IFTA account of the truck owner.
You must submit an IFTA report detailing the miles driven and gallons purchased at the end of each quarter. These reports will determine if you owe any further taxes or if you are due a refund. Your refund or debt will be issued by the IFTA office in the trucking company’s home State
It should be noted that IFTA reports must be submitted every quarter and that IFTA decals expire at the end of every year.
Am I eligible for IFTA?
If your motor vehicle is used or designed to move people or property, it probably needs to be registered under the IFTA. Specifically:
- If you have ave three or more axles
- If you have two axles and a gross vehicle or registered a gross vehicle that weighs more than 26,000 pounds or 11,797 kilograms
- If your vehicles are used in a combination with a combined gross vehicle weight of more than 26,000 pounds or 11,797 kilograms.
- If you have a bus capable of transporting at least 20 passengers (less relevant to trucking companies).
- It is important to note that there are some fleets that fit this description yet do not require an IFTA license, such as intrastate fleets.
These fleets must run on diesel, propane, or natural gas to be eligible for tax reporting. Even gas-powered automobiles must be licensed.
How do you get an IFTA Permit?
Your first step is to decide where your base jurisdiction is. Your base jurisdiction is where
- your qualified motor vehicles are based for vehicle registration purposes;
- the operational control and operational records of your qualified motor vehicles are maintained or may be made available; and
- some miles are accrued by qualified motor vehicles within a fleet.
For example, if your base jurisdiction is Illinois, you must electronically submit Form MFUT-12, Application for Motor Fuel Use Tax, IFTA License, and Decals, using MyTax Illinois to register for motor fuel use tax and receive proper Illinois IFTA credentials.
If Illinois is not your base jurisdiction, you must contact the state or province in which you are based for specific registration instructions.
Decals are issued in sets of two. One set of decals is required for each qualifying vehicle you intend to operate.
Should I apply for an IFTA license?
If you are based in a member jurisdiction and operate a qualified motor vehicle in 2 or more member jurisdictions, yes. If you usually operate your vehicles only in one jurisdiction, but make occasional trips outside the base jurisdiction, you may elect to purchase trip permits for that occasional travel. Permitting services can usually be contacted from any major truck stop. Contact a permitting service for rates.
What if I have qualified motor vehicles in more than one jurisdiction?
It is important that you contact one of those jurisdictions. You may be able to consolidate your operations under one license. The jurisdiction you contact will assist you and give you information on how that can be accomplished.
What do I include in an IFTA report?
If a fleet is eligible to obtain an IFTA license, the application must be completed in the member state where the fleet operates. Some information that must be included:
- Your registered business name
- Your Postal address
- Your USDOT number (federal business number)
The IFTA license application is available for download on the internet. Some jurisdictions demand that these forms be mailed, while others allow for transmission via fax or a taxpayer services office. Trucking fleets can be issued a temporary license while waiting for their permanent license and decals to arrive in the mail after their IFTA application has been processed.
How do you calculate IFTA?
You do not! You let our IFTA Manager program do all the heavy lifting. But, if you want to do it the hard way, you need to know:
- how many miles does your truck drive through each state.
- how many gallons of fuel your truck purchased in each state
- the type of fuel
- total miles
- total fuel
- what miles were considered taxable. And, there is more. Ok, my head hurts. If it was me, I would rather have this great fuel tax module of TMS Digital software calculate all this for me! But, if you want to read more, Florida has a well-written pdf with more detail: Click Here
So, before you file IFTA you need to calculate your fuel tax.
- Track down the miles you drove in each State (make sure you know the exact number of each State and not the total).
- Next, you will need the total gallons of fuel purchased in each jurisdiction. You will need to keep the original invoices and/or receipts of your fuel taxes for proof. These must include:
- Fuel purchase date
- Fuel seller’s name and location
- Type of fuel purchased
- Vehicle plate number
- Number of gallons purchased
- Price per gallon
- Driver’s name
- Calculate the fuel (per state).
All you have to do is:
Total Miles Driven ÷ Total Gallons = Overall Fuel Mileage
(You will need to round off the miles per gallon (MPG) value to two decimal places)
In order to calculate the total gallons of each State you drove in:
Total Miles Driven in the State ÷ Overall Fuel Mileage = Fuel Consumed in the State
- Then, you need to calculate the taxes owed for each state and province.
You can check out the exact fuel taxes on the Internet for accuracy, since they may change.
- And lastly, you need to calculate them all together.
Fuel Tax Required in State X – Fuel Tax Paid in State X = Fuel Tax Owed to State X
How do you file IFTA?
First of all, there are three ways to file IFTA: electronically, by mail or in person.
However, filing your IFTA report electronically is very easy and recommended for saving your time. All you need to do is:
- First, log in to your State agency’s Department of Transportation
- Then, you click on process to tax return
- You fill in the information of the Quarter, Fuel type, the total miles you counted, total gallons
- Next, it will automatically calculate your average fleet of MPG
- If you have non-IFTA miles, you need to put in that information too
Once you fill in the information above, you will have to report on your mileages per State. If you drove in more than one State, you will need to report each one.
For example, if you drove in Alabama, you will have to put the exact miles and gallons only in Alabama. This is why you need to keep track of your MPG in every State.
- Firstly, you put the total miles of the State
- Next, you fill in the taxable miles (this is most likely the same number as your total miles)
- Then, you put the tax-paid gallons. These are the gallons you purchased.
- You will see the fuel tax rate based on the State you have chosen
- And, you click on “add” in order to add it to your worksheet on the site.
After you’ve put all the States and the records you kept for your quarterly IFTA report, the site automatically calculates the taxable gallons for you, based on the distance you drove and your fuel mileage.
For example, let’s say your taxable miles were 6.865 and your taxable gallons were 904. Since you put how much tax-paid gallons you had, and if that is 585 for example, then your taxable gallons are 319.
On the report, next to that you will see your tax due, how much you owe.
- After you finish reporting all the records from each State, you press the “continue” button and “confirm”
And that was how you can file your IFTA report online, simple as that. You can even download your report from the site on PDA form.