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Understanding trucking compliance can be a total mind bender, so much so that even the IFTA, IRP, and Form 2290 are probably used in vain across the trucking world. Whether you're an owner-operator, fleet manager, or someone just getting an introduction to interstate trucking, knowing these key compliance requirements keeps you from racking up penalties and time-consuming charges. Here's a look at what the terms mean and how they work.
The International Fuel Tax Agreement (IFTA) is a cooperative agreement between U.S. states and Canadian provinces that simplifies reporting fuel use by motor carriers. What you instead do is file one quarterly IFTA report through your base jurisdiction, rather than filing fuel tax returns separately for every state you run through.
IFTA ensures the accurate distribution of fuel taxes and determines by which miles travelled, fuel purchased, and taxes owed with owing states all make it one of the primary requirements for a truck crossing state lines.
The IRP is a single registration agreement that allows a commercial vehicle to operate legally into and from two or more jurisdictions or Canadian provinces with an apportioned plate. Within IRP, one license earns access to all the areas, and instead of paying for separate registrations for each state, fees are just paid based on the mileage driven in each jurisdiction.
IRP makes such illegal interstate traveling liable for citation or impound. This means trucks can cross state borders without the use of a multitude of permits-specific to the particular state.
Form 2290 is an annual IRS requirement for vehicles weighing 55,000 or more pounds. The trucker must pay the Heavy Vehicle Use Tax (HVUT) and then obtain a Schedule 1 to register the vehicle with the DMV, or to renew his or her IRP plates.
Without stamped Schedule 1, you can't register your truck, renew IRP, or be compliant with federal tax regulations, tying Form 2290 directly to road usage and highway maintenance by the federal government.
Although people use these words interchangeably, actually, each serves a different function:
IFTA = fuel tax reporting
Has to do with tracking fuels purchased and miles traversed from one state to another.
IRP = vehicle registration
Allows legal interstate operation, all under one apportioned license plate
Form 2290 = federal tax filing
Paying the Heavy Vehicle Use Tax, leading to Schedule 1 for registration
In Short:
IFTA concerns fuel, while IRP concerns registration and 2290 federal tax. The three form an integrated compliance system for the operation of legal, operable, and tax-ready commercial vehicles.
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