IFTA Taxes: Working of IFTA Taxes
April 29, 2021 0IFTA DecalIFTA Fuel Tax ReturnsIFTA PermitIFTA ProgramTemporary IFTA Permit
IFTA, the abbreviated form of the International Fuel Tax Agreement, is well known to almost everyone who travels commercially on the roads of the United States. Though it has been established for the sake of commercial truck drivers, traveling interstate and across borders with Canada, many people are unknown to the concepts of the International Fuel Tax Agreement and its working. This blog is dedicated to telling you all the essential facts about IFTA Taxes, and how they charge fuel tax, plus I will also tell you how you could use the services of Global Multi Services to get your IFTA Permit and IFTA filing.
What is IFTA?
The International Fuel Tax Agreement was signed in the year 1996 between the forty-eight states of the United States and the provinces of Canada. Before 1996, IFTA was known and operating in just a few states of the US. Before the introduction of IFTA, the truckers had to go through a lot of hassle and nuisance of filing fuel taxes in each state that traveled through, and each state had its tax rates too. So it became very fiendish for truckers. Therefore, although it was introduced in 1983, the IFTA was signed by almost all states of the United States, except the two, and provinces of Canada, by the year 1996.
Who are eligible to sign it
The following categories of vehicles are entitled to get an IFTA Permit and file the IFTA Taxes:
- Those vehicles that travel interstate for commercial purposes and have a gross vehicle weight of at least 26,000 pounds and two axles installed in the vehicle.
- Those vehicles that travel interstate for commercial purposes and have three or more than three axles installed in them.
- And, Those vehicles that travel interstate for commercial purposes and have a gross vehicle weight of more than 26,000 pounds.
How IFTA is reported
The IFTA Filing is done quarterly, and the due date to file taxes is usually the last date of the month following the last month of the quarter.
To file the IFTA taxes you have to keep a thorough data of your travel details such as which states you traveled in, how much distance you traveled in those states, how much fuel your vehicle consumed in the traveled states, and what mileage your vehicle while traveling through those states. And the basis of all these data, one could collect their taxes. But a boon here is that, for which the IFTA was specifically introduced, you just have to pay the taxes according to the tax rates of your base jurisdiction and not according to the tax rates of the states that you traveled through.
How Global Multi Services could help
Though the Government of the United States and Canada has done a tremendous job by introducing the IFTA System, still it did not make the life of truckers as easy as expected. To file the IFTA Taxes, you still have to keep comprehensive data of your travel details and do complex calculations to check how much tax you have to pay, at the end of each quarter. That is when Global Multi Services comes in, our skilled and experienced employees keep all the details of your travel and fuel consumption, and then at the end of each quarter, they meticulously calculate your IFTA Taxes. They could even do your IFTA Filing for you.