International Fuel Tax Agreement

The International Fuel Tax Agreement (or IFTA) is an agreement between the lower 48 states of the United States and the Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction. Alaska, Hawaii, and the Canadian territories do not participate. An operating carrier with IFTA receives an IFTA license, a set of decals which are applied to qualifying vehicles. The carrier files a quarterly fuel tax report. This report is used to determine the net tax or refund due and to redistribute taxes from collecting states to states that it is due.

This tax is required for:

• All vehicles with a gross vehicle weight rating or registered gross vehicle weight in excess of 26,000 pounds, and/or
• Any vehicle with 3 or more axles regardless of weight, and/or
• Any combination of vehicles which exceeds 26000 pounds gross vehicle weight,

IF those vehicles are operated on the public highway in states which are part of the IFTA agreement,

EXCEPT for vehicles which are specifically exempted (generally motor homes and other private, not-for-hire vehicles).

Promulgation

Prior to IFTA each state had its own tax system, and a truck needed tax permits for each state in which it operated. Most states established Ports of Entry to issue permits and enforce tax collection, which was burdensome to the trucking industry and the states. Pre-IFTA trucks in inter-state commerce carried a special plate ("Bingo Plates") upon which each state's permit sticker was affixed.

Categories: Taxation in the United States | Taxation in Canada | Canada • United States relations | Trucks