IFTA Permits, A Solution to Interstate Fuel Tax Filing

 

The concept of IFTA, also known as the International Fuel Tax Agreement, was put forward and established in 1983. It emerged as a solution to the hassle of filing fuel taxes in different states that the commercial vehicle owners used to drive through. After the introduction of the IFTA Program, which was signed between the 48 states of the US and all the 10 provinces of Canada, the commercial vehicle drivers or the truckers just have to file for taxes quarterly and that too not in every state that travels through but just in their base jurisdiction, I mean the state or province in which they have applied for the IFTA Permit. In this blog, I am going to talk about the topics of IFTA that people are usually skeptical of.

Whom Shall File for IFTA?

This is a topic that most people are seeking the answer for, that who must have to file for IFTA Permits? There is a wide misconception among the majority that only those truckers that travel within different states must file for the IFTA, this is not the case. All those vehicles that travel interstate and have commercial vehicles with three or more than three axles or have the gross vehicle or registered gross vehicles weight of more than 26000 lbs. i.e., 11793 kg, or the owner of those commercial vehicles that have two axles and gross vehicle weight of more than 26000 lbs. must file for the IFTA Permits or should get into the IFTA Program. And those that fulfill the above-mentioned requirements and have filed for the IFTA Permit are entitled to get a pair of IFTA Decal for their vehicle or each of their vehicle, in case they own more than one vehicle. And In case you have not registered in your state for an IFTA permit but traveling among different states for commercial purposes, you could also apply for a Temporary IFTA Permit in the state that you are traveling in. 

How the IFTA System Works?

You got all the rights to know and scrutinize the working of the IFTA system. But just to save your time, I have already done all the scrutiny for IFTA and will try to make you understand the same in the simplest terms. In the times before the establishment of the IFTA, every state had its own self-made Fuel Tax structures, and the truckers maneuvering through these states have had to apply for permits in each of the states that they travel through. Plus, the truckers traveling interstate used to get something called ‘bingo plates’ on which the state permits of each state were used to be fixed. All this was a nuisance for the truckers. Since the development of the IFTA system, the interstate commercial travelers that are eligible for the IFTA and even possess the IFTA permits, must pay the fuel taxes of the states that they travel through, and these fuel taxes are credited back to the travelers’ or IFTA licensee’s account. Then on a fiscal quarter basis, the IFTA permit holders have to give a record of their travel details, fuel consumption, and mileage given by their vehicle while traveling through other states, to their base state or the state in which they have registered for the IFTA. Then their base state, according to its fee structure for the IFTA taxes, assigns tax returns to states that the IFTA licensees of their state traveled through.