Aside from the benefits to trucking companies, IFTA ensures that jurisdictions are adequately compensated for using their roads by heavy commercial vehicles.
IFTA reporting only requires carriers to report inter-jurisdictional fuel use to their home state. The state will collect net fuel use taxes, process tax returns, and distribute funds to all other states.
The base state is also in charge of enforcing compliance through regular audits. These simple steps can be used to calculate IFTA taxes:
Keeping track of how many miles you’ve traveled in each state
Fleet managers and drivers must collaborate thus recording the fuel consumption in different jurisdictions individually. This necessitates fleets being highly organized in handling their drivers’ duty status records.
Drivers must also contribute by meticulously recording their odometer readings whenever they cross state lines. Route planning or fleet management software can be used to digitally log the miles your drivers travel in each jurisdiction to avoid human error.
Including gas purchases
The total gallons of fuel purchased in each jurisdiction are the following information required for IFTA reporting. Carriers must keep the original receipts or invoices to prove they paid the fuel tax. These documents must include the following:
- Date of fuel purchase
- Name and address of the fuel seller
- Fuel type purchased
- Vehicle identification number
- Purchased number of gallons
- Cost per gallon
- The driver’s name
Calculating the amount of fuel consumed per state
Once you’ve tallied the total miles and fuel purchased, it’s time to calculate your vehicles’ fuel mileage for each jurisdiction. To calculate your fleet’s overall fuel mileage, use the IFTA mileage calculator.
Calculating the amount of tax owed in each state and province
The amount of fuel purchased per jurisdiction happens to be the key metrics to calculate the tax amount your fleet owes to each authority. This depends on the rates in effect during recent IFTA quarter.
The International Fuel Tax Association website has a chart of tax rates for each jurisdiction and their respective fuel types. Please remember that these rates may change until the next due date. You are only required to perform this calculation at that time.
Putting everything together
Fuel receipts or withdrawal slips can be used to calculate fuel tax paid at the time of purchase.
Fuel tax preparation can be time-consuming. It will be easier to tackle once you fully understand the intricacies of IFTA. IFTA eliminates the inefficient fuel tax reporting practices of the past. It also allows jurisdictions to fund road repairs and improvements, directly impacting commercial fleet safety. Using the most functional IFTA mileage calculator will be the best thing to do. The fuel reporting and tax calculation will be an easy process.
Brian Styris is the author of this article. For more details about Electronic Logging Devices please visit our website: etrucks.com
