IFTA stands for the International Fuel Tax Agreement. It is an agreement between 48 states in the United States and 10 provinces in Canada that simplifies the reporting and payment of fuel taxes for motor carriers that operate in multiple jurisdictions. Under the IFTA, motor carriers have to file a single fuel tax return, which covers all the jurisdictions in which they operate.
The IFTA requires motor carriers to track the fuel that is purchased and consumed in each jurisdiction and to report this information on a quarterly basis. The fuel tax rates vary by jurisdiction, and the revenue collected is used to fund transportation infrastructure projects.
Motor carriers that operate commercial motor vehicles with a gross vehicle weight of more than 26,000 pounds, or with a combination weight of more than 26,000 pounds, and travel between two or more jurisdictions are required to have an IFTA license and file quarterly fuel tax returns.
In addition, motor carriers that operate in certain jurisdictions that are not covered by the IFTA, such as Alaska, Hawaii, and the District of Columbia, are required to comply with the fuel tax reporting and payment requirements of those jurisdictions.
Filing IFTA returns can be complicated and time-consuming, as it requires careful record-keeping and knowledge of the fuel tax rates in each jurisdiction. However, failure to file IFTA returns or to pay the fuel taxes owed can result in penalties and fines, as well as the loss of the motor carrier's IFTA license.