IFTA (International Fuel Tax Agreement)
A tax agreement that simplifies fuel tax reporting for trucks operating in multiple states.
Definition
The International Fuel Tax Agreement is a compact between the 48 contiguous U.S. states and Canadian provinces that simplifies fuel tax reporting for motor carriers operating in multiple jurisdictions. Instead of filing separate fuel tax returns in each state, carriers file one quarterly IFTA return with their base jurisdiction, which redistributes taxes. IFTA applies to vehicles over 26,000 lbs or with 3+ axles regardless of weight.
Why it matters to you
IFTA is why you record fuel purchases and miles by state. One quarterly return redistributes fuel tax to the states you actually drove in, so buying cheap fuel in a low-tax state does not avoid the tax owed elsewhere. For an owner-operator, sloppy records here turn into an audit and an assessment based on the worst assumption available.
FAQ
What does IFTA (International Fuel Tax Agreement) mean?
A tax agreement that simplifies fuel tax reporting for trucks operating in multiple states.
Why does IFTA (International Fuel Tax Agreement) matter to a driver?
IFTA is why you record fuel purchases and miles by state. One quarterly return redistributes fuel tax to the states you actually drove in, so buying cheap fuel in a low-tax state does not avoid the tax owed elsewhere. For an owner-operator, sloppy records here turn into an audit and an assessment based on the worst assumption available.
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