International Fuel Tax Agreement (IFTA) Frequently Asked Questions
- What is IFTA and why do I need it?
- Vehicles meeting the following criteria are tax liable and need motor fuel road
tax credentials to be operated in all jurisdictions:
- have two axles and a gross vehicle weight or registered gross vehicle weight of more than 26,000 pounds; OR
- have three or more axles regardless of weight; OR
- are used in combination, when the combined weight is more than 26,000 pounds gross or registered gross vehicle weight at any time
- IFTA is the International Fuel Tax Agreement, an agreement between all states and Canadian provinces, which allows a carrier to register and pay motor fuel road taxes in the carrier's home or base state for all participating jurisdictions. IFTA is beneficial to motor carriers because it eliminates the need for a motor carrier to contact every jurisdiction he intends to operate in to get a motor fuel road tax permit. It also eliminates the need for a motor carrier to file a quarterly motor fuel road tax return with every jurisdiction in which he has traveled. It allows a motor carrier to take advantage of all over-purchase fuel tax credits because one tax return is filed for all jurisdictions.
- How do I keep mileage and fuel records to file a tax return?
- You must keep mileage and fuel records in order to complete your quarterly motor fuel road
tax returns. The mileage records are also necessary when you renew your apportioned license
plates under the International Registration Plan (IRP). An acceptable document used to verify
vehicle mileage is an Individual Vehicle Mileage Record (trip report). A trip report must include
at least the following information:
- Vehicle identification number,
- Starting and ending date of trip,
- Point of origination and destination,
- Intermediate stops,
- Routes of travel,
- Beginning and ending odometer readings of the trip,
- Mileage by jurisdiction,
- Driver's name
- Retail fuel purchase information,
- Information regarding withdrawals of fuel from bulk storage made in connection with the reported trip.
- You must keep a complete record of all fuel purchased or received, including retail purchases and
withdrawals from bulk storage. A receipt or invoice or a credit card receipt showing evidence of purchases and taxes paid
must be retained to support retail "over the road" purchases of fuel. Acceptable receipts must include:
- Date of the purchase,
- Seller's name and address,
- Number of gallons or liters purchased,
- Fuel type,
- Price per gallon or liter,
- Total amount of sale,
- Vehicle unit number, and
- Purchaser's name.
- If bulk fuel is stored, you must maintain records supporting inventory on hand, purchases and withdrawals. Withdrawal records
must contain at least the following:
- Date of withdrawal
- Number of gallons or liters withdrawn
- Fuel type and vehicle unit number
- When do I need to file my tax return?
- DMV will mail a tax return to you each quarter. Reporting periods and deadlines are as follows:
- NOTE: If a filing deadline falls on a weekend or a legal holiday, the next business day becomes the deadline.
|Reporting Period||Filing Deadline|
|January 1 - March 31||April 30|
|April 1 - June 30||July 31|
|July 1 - September 30||October 31|
|October 1 - December 31||January 31|
- What is the penalty if I do not file my tax returns on time?
- Your return and the total tax due must be postmarked or received by DMV by the deadline. If your return is late or you do not submit the total tax due, you will be subject to a late fee of $50 or 10% of the tax due, whichever is greater. Interest will also be assessed regardless of when the payment is received within the month.
- What are taxable miles?
- Taxable miles are the sum total of the miles you traveled in any jurisdiction that are taxable. If a jurisdiction allows any exemptions and you qualify, you may deduct the miles you operated under that exemption from your taxable miles.
- Example: Ohio exempts all two-axle trucks operated without a trailer and two-axle trucks operated with a trailer weighing under 3,000 pounds empty. If any of your operations in Ohio meet this criteria, you may deduct those miles from your taxable miles in Ohio. If you operated under a temporary fuel trip permit, those miles may be deductable depending on exemptions offered by certain jurisdictions.
- Why does Virginia have a surcharge tax?
- Road tax revenues are used to support construction, reconstruction or maintenance of the roads. The philosophy behind a surcharge is that heavier vehicles cause more damage to the highways; therefore, the taxes paid for those vehicles should be higher than the taxes paid for smaller vehicles. There are other jurisdictions that also have a surcharge.
- Are any vehicles exempt in Virginia from paying motor fuel road taxes?
- Yes. The following vehicles are exempt from motor fuel road tax reporting:
- Recreational vehicles,
- The first two trucks or tractor trucks that are licensed in Virginia and are used for farm use only,
- Vehicles owned by a licensed motor vehicle dealer that are operated without compensation for purposes related to a sale or for demonstration, and
- Vehicles or equipment such as well-drills or cranes if the vehicle is not required to display license plates when moved on Virginia highways
- These exemptions may not apply in other jurisdictions and it may be necessary for a Virginia based carrier operating these vehicles to obtain and IFTA license and decal to satisfy jurisdiction requirements where they travel.