Just a simple glimpse into the past can reveal us the importance of the International Fuel Tax Agreement- IFTA and IFTA stickers.
Back in the day, before IFTA was introduced to the U.S. trucking industry, drivers were required to purchase fuel permits from each state in which they were traveling.
Prior to that, truckers were losing time to stop and purchase permits, which was beginning to cause additional route miles.
And we all know what that means in the trucking world.
So, in order to improve the overall trucking industry, at the beginning of 1980’s officials from Washington, Iowa and Arizona made an agreement to start using a single permit.
That way they improved the workflow of many trucking companies back in the day. Just in the same manner as the International Fuel Tax Agreement- IFTA is helping the trucking industry nowadays.
Nonetheless, just 15 years later, all 48 States including 10 Canadian Provinces joined the IFTA Agreement.
The overall idea that stands behind the International Fuel Tax Agreement and IFTA stickers was to have a single permit. That way the taxes were enabled to be accessible by one authority. Which later on distributes it to States and localities.
This leads us to the following question.
1. Which are the advantages of the International Fuel Tax Agreement and IFTA stickers?
Since the International Fuel Tax Agreement has been designed to reduce the administrative burden of reporting fuel taxes, straight proportionally it is offering numerous advantages, such as are the following:
- Trucking companies get to use a single fuel tax license. This fuel tax license is being issued by the base jurisdiction authorizing travel in all IFTA jurisdictions;
- Fuel tax audits that are being performed by the base jurisdiction;
- Quarterly tax report. This report is being filled only with the base jurisdiction for reporting operations;
So, let’s learn how IFTA and IFTA Stickers are helping trucking companies in improving their workflow!
2. How Does the International Fuel Tax Agreement and IFTA Stickers Work
Every now and then we meet people in the trucking world that often question IFTA.
To begin with, the fact that the International Fuel Tax Agreement is helped by the International Fuel Tax Association.
As such, IFTA was primarily created to simplify the fuel reporting process.
So, this is how the International Fuel Tax Agreement and IFTA stickers actually work.
Once the trucking company undergoes the application and approval procedures, straight away they get to enjoy the convenience.
In other words, the fuel taxes that IFTA is distributing are based on the miles driven in a particular state.
That is to say, at this point, you can see how IFTA works more precisely.
For example, you have a truck driver that fuels up his truck and pays tax in Illinois, and then he drives to Oklahoma.
Regardless that, IFTA will transfer the taxes from Illinois to Oklahoma, including each mile driven in the state.
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Hence, not to forget, all IFTA certified vehicles should have two IFTA stickers all the way. Further, you can find more details about it.
To get back to the taxes. Regardless of how many States the truck driver has driven, all fuel taxes will be issues on one fuel tax license.
3. IFTA License Application Procedures
So how can your trucking company become IFTA licensed?
To continue with, in order for your trucking company to issue IFTA license, you will have to have:
- Qualified motor vehicles registered in your State;
- You have already established a place of business in your State;
- Have 2 axles and a GVW of more than 26,000 pounds;
- Have 3 or more axles regardless of weight;
- Operate in more than one jurisdiction;
So, if you cover all these points you can apply for your IFTA license and get your IFTA stickers.
Note that you will have to fill out an application at your home State.
Once your application is being processed and approved you will be issued with IFTA license and two IFTA stickers for each qualified motor vehicle in your fleet. In addition, the role of the IFTA stickers is to allow your vehicles to travel to any jurisdiction by a qualified vehicle.
Yet, you should pay attention to renew your IFTA license and decals annually. As well as to file quarterly reports. It is the only way how you can maintain valid IFTA credentials.
4. IFTA rules to follow
First and foremost, once you are being approved for IFTA license you will have to pay special attention to the following 5 rules:
- IFTA license and decals are valid for one year from January 1st to December 31st;
- Make sure that you renew your IFTA license and IFTA stickers on time;
- Display the IFTA stickers on both sides of your truck cab– that way the authorities will stay informed that your vehicles are IFTA licensed;
- File IFTA tax return and pay all fuel taxes in a timely manner;
- Keep in mind to inform all your truckers to carry with them in the cab a photocopy of your IFTA license at all times;
5. Renewal of IFTA Annual License and IFTA Stickers
As previously mentioned, in order to stay IFTA complaint, already IFTA licensed trucking companies will have to renew their IFTA licenses and IFTA stickers on a yearly basis.
Hence, the easiest way for trucking companies to renew their IFTA accounts is by doing it so online.
Also, you can renew your IFTA annual license and IFTA stickers by mailing the completed renewal notice.
Yet, when are trucking companies eligible to renew their IFTA license online?
There are two points that trucking companies should fulfill in order to renew their IFTA license online. Starting from having an IFTA account that has been active within the last 6 months, as well as to have IFTA account not delinquent for any Tax Quarter.
