To assist your fleet to streamline its IFTA procedure, we have created a guide to knowing the arrangement and making certain your company avoids common filing mistakes.
If a company pumps 200 miles worth of gasoline in Indiana but compels 100 of these miles in Ohio, will he need to submit another fuel tax record in both states? Ahead of IFTA, the answer would have been yes. However, in 1996, the International Fuel Tax Agreement (IFTA) was made to streamline fuel taxation procedures and allow carriers to submit one fuel tax form, even if working in more than 1 state.
Though IFTA has alleviated a lot of the pain points of gasoline tax reporting, it may still be a cumbersome procedure for several fleets, especially because it has to be registered four times annually. To assist your fleet to streamline its IFTA procedure, we have created a guide to understanding that the arrangement and making certain your company avoids common filing mistakes.
What is IFTA?
Before IFTA, fleets were needed to acquire a gas license in every state they functioned in. It was challenging for carriers since it compelled them to record fuel tax reports across several states–each one comprising a special set of requirements based on particular state laws. However in 1983, Arizona, Iowa, and Washington came together to make a more straightforward solution that could remove a number of their compliance inefficiencies carriers seasoned, while nevertheless excise tax owed for every state a car operated in.
Over ten decades after, in 1996, IFTA, as it is known now, was launched. IFTA is an agreement between the lower 48 states and 10 Canadian provinces which aims to simplify reporting of fuel use by interstate motor carriers operating qualified motor vehicles in multiple authorities. To put it differently, IFTA was made to streamline fuel coverage for trucks that drive in many locations. It applies to all parts of the United States except for Alaska, Hawaii, and the District of Columbia.
Which exactly are IFTA requirements?
There are numerous fuel tax reporting conditions to be conscious of when finishing your IFTA paperwork.
First of all, commercial carriers have been needed to record miles driven, gas purchased, and gas tax paid in every state their vehicles drove for a specified quarter. Remember you will have to record total miles driven and fuel bought in every jurisdiction, not only the combined total sums.
Meaning that if a motorist adds fuel for their automobile in 1 jurisdiction, he’s required to report the number of miles which automobile drove in that authority in addition to any additional jurisdiction(s) the vehicle passed through. This report will subsequently allow jurisdictions to accumulate or charge proper amounts of taxation depending on the mileage traveled.
- Vehicle A pumps 200 mph of gasoline from the state of Washington
- Vehicle A pushes from Washington to Oregon and then straight back from Oregon into Washington
- Vehicle A has pushed a total of 100 kilometers in Washington along with a total of 100 kilometers in Oregon
- Carrier A notes the mileage in Washington and Oregon for Vehicle A
- Carrier A reports this at the end of the quarter
This information is submitted to your carrier’s base jurisdiction which reviews and decides whether the provider owes taxation or will get an IFTA return.
Frequent IFTA reporting mistakes
Assessing your IFTA fuel tax report may feel like an overwhelming task–but it does not need to be.
- Estimating Fuel Calculations
It may be tempting to gauge the quantity of fuel that your fleet employed in the previous 3 months when quarterly IFTA because dates are right around the corner, however, this may be an expensive mistake. Does IFTA reporting demand accurate records, but erroneous mileage and gas calculations can set your fleet at risk of an audit.
To take the guesswork from coverage, use fleet management software to correctly record engine carrier miles to you. Samsara plugs directly into a car’s OBD interface to automatically capture engine information –such as miles are driven–eliminating any need to manually monitor. Simply install Idling Alerts to receive information when motorists are idling or receive Gas Reports emailed weekly to rapidly review fleet gas action all in 1 area.
- Not listing private miles
Truth is essential and IFTA doesn’t differentiate between different route kinds –a mile is a mile and it has to be accounted for if you file your coverage. On the reverse side, be ready to submit an IFTA account for commercial motor vehicles which did not clock some miles throughout the quarter. If a car didn’t function during a specific quarter, you’re still required to submit an IFTA yield as a’Zero Miles’ report. To accomplish this, just file an IFTA return without inputting any mileage or gas information on the form and then choose’No’ for your’No’ Operation’ alternative.
- Odometer or GPS Issues
Your IFTA coverage should be true. This implies that if any component of the car affecting mileage malfunctioned during the reporting interval, it ought to be flagged if you document it.
If your automobile experienced matters like an odometer or even GPS difficulties, or another issue that could impact mileage, then you have to account for it on your IFTA report. A miscalibrated judge or maybe worn tires may change an odometer reading, which may lead to an inaccurate mileage reading. To guarantee mileage is properly reported, think about a fuel management option that automatically attracts engine information to correctly quantify mileage.
- Filing late
The greatest mistake you can make in regards to IFTA reporting isn’t submitting the accounts at all. Assessing your IFTA report overdue or not submitting it’s going to cause a fine of $50 or even 10 percent of their tax liability, whichever is higher. Additionally, your fleet runs the danger of an audit, and it will be very likely to need more paperwork and time compared to submitting the accounts in the first location.
How to manage your IFTA reporting with OTS
To analyze your business OTS provides you IFTA Fuel Tax Software which helps you to track fuel and miles traveled per state. All stats are represented with some fancy graphs! OTS updates trucking companies to ensure that IFTA reporting is accurate and ready before the mandated deadline. We assure you to provide peerless quality services with 100% commitment. With end-to-end solutions available, Online Trucking Solution offers full and streamlined integration of your system into fuel expense, GPS, factoring, IFTA Reporting Software, and many other reports.
We will help you get automated IFTA rate updates. IFTA is very user-friendly to be experienced by our clients which provides them accurate reporting per truck, per month, or per quarter, and you can access our IFTA software on any device that connects to the internet. OTS gives you the most reliable protection from interest charges, penalties, and unnecessary fines.