Commercial vehicles that run in more than one state (or Canadian province) usually display IFTA stickers. The stickers are designed so that highway authorities can tell the vehicle's IFTA status at a glance.
- The letters "IFTA" appear diagonally from the upper left to the lower right of the sticker
- The year of issue in Color and the last 2 digits of the year printed in white
- Example: the 2021 IFTA sticker is red with the number 21 in white
- 2022 IFTA stickers will be blue, 2023 will be green
- Each year cycles between red, blue, and green
- Abbreviation of the state or province (the same as the post office uses) printed in white
- An outline of the shape of the state or province in white
- IFTA sticker serial number in black typeface within a white bar
You should display two IFTA stickers, one on each side of the cab. Many trucking companies get IFTA stickers for the upcoming year in December, while the current IFTA sticker is still in force.
A lot of drivers will attach the IFTA sticker for the new year alongside the current year's sticker.
You may see some trucks with several expired IFTA decals next to the current year. We don't recommend showing expired IFTA stickers.
It's not against any regulations, but it can draw attention from highway authorities. You want to be the least interesting thing smokey bear has seen all day.
What is the International Fuel Tax Agreement (IFTA)?
The US lower 48 states and 10 provinces of Canada are members of the International Fuel Tax Agreement (IFTA). These states and provinces are called jurisdictions.
A vehicle that participates must display decals or FTA stickers for the current year's registration.
Before IFTA, trucking companies had to get permits for each state they operated in. The permits for many states were decals attached to a truck's license plate. Having all those stickers made it look like a bingo card, and so a big truck's license plate was called a "bingo plate".
The pre-IFTA fuel tax system had trucking companies, the states, and provinces buried in paperwork and it was expensive to manage. So the states and Canadian provinces entered into the IFTA agreement.
What Is IFTA Reporting?
Instead of filing separate fuel tax forms with each individual jurisdiction, IFTA allows you to submit one return each fiscal quarter.
Each quarter, trucking companies must complete an IFTA fuel tax report. The company calculates the taxes due for each jurisdiction, and then gets a refund for overpayment or pays any shortfall.
To complete the IFTA report, you need to keep track of:
- Fuel purchases
- Date of transaction
- Name and address (or vendor code) of seller
- Quantity of fuel
- Type of fuel
- Price per gallon or liter
- Vehicle ID
- Purchaser ID (company or owner-op with authority)
- Taxes paid on fuel purchase
- Vehicle identification number (VIN) for each unit
- Distance for each trip
- Beginning and ending dates
- Origin and destination
- Travel route
- Roads used when entering into each jurisdiction
- Beginning and ending mileage
- Total distance
- Distance in each jurisdiction
- Vehicle weight (in some jurisdictions)
IFTA Tax Rates
Each jurisdiction (state or province) sets its own fuel tax rate. You can look up the rates for each jurisdiction in the IFTA Tax Rates Matrix. There you can see the latest updates for each state or province and view the most recent changes.
US and Canadian Currency Exchange
The value of a Canadian dollar is different from the US dollar. If you pay IFTA taxes in US dollars, you'll have to calculate the exchange rate to pay any Canadian jurisdictions you've operated in during the quarter.
For IFTA reporting, use the exchange rate from the Bank of Canada which posts at 16:30 hours (4:30 pm ) Eastern time each day.
US Miles and Canadian Kilometers
In the United States, we use the English system of weights and measures, but Canada uses the metric system.
Where we measure fuel volume in gallons, Canadians measure in liters. Distance is measured in kilometers in Canada while we use miles.
If you operate in Canada, you should know these conversion rates so you can keep your records straight.
- 1 liter = 0.2642 gallons
- 1 gallon = 3.785 liters
- 1 mile = 1.6093 kilometers
- 1 kilometer = .62137 miles
What Are the Penalties for Late IFTA Reporting or Payment?
You must file your IFTA tax report before the due date each quarter. The due dates are:
- Q1 (Jan-Mar) Apr 30
- Q2 (Apr-Jun) Jul 31
- Q3 (Jul-Sep) Oct 31
- Q4 (Oct-Dec) Jan 31
If the due date falls on a Saturday, Sunday, or a Federal holiday, the due date is the next business day.
Late IFTA Reporting Penalties
If you file your IFTA return after the due date, you face a penalty of $50 or 10% of taxes due, whichever is greater. But if you're based in Nevada, you pay a $50 penalty plus 10% of the amount of tax.
Late IFTA Payment Penalties
Starting the month after your IFTA tax is due, you pay .4167% of the taxes you owe as a penalty for late payment. Each month of unpaid taxes after receives a penalty of .4167%
For underpayment, you also receive a penalty of .4167% of unpaid taxes for each month. You may also be charged interest for unpaid taxes.
Failure to report or pay taxes due can lead to having your IFTA license revoked.
Reporting Requirements
You can report your IFTA tax usage electronically with your state's online tax filing or with electronic data interchange (EDI) software.
You can also file with paper Form 56-101, IFTA Fuel Tax Report, and Form 56-102, IFTA Fuel Tax Report Supplement. If you mail in the form, the postmark date needs to be on or before the due date to avoid penalties.
You may hand-deliver your IFTA return to your tax office on or before the due date.
Payment Methods may vary between states and provinces. Many jurisdictions allow you to pay by e-check or credit card. If you file a paper report, you can mail a check with the report or pay in person at the tax assessor's office.
Who Needs IFTA Stickers?
You will need to pay the proper fuel tax for each IFTA jurisdiction you run in. If you only occasionally operate outside of your home state or province, you can get fuel permits as needed.
But if you frequently operate in more than one jurisdiction, you're better off with an IFTA license.
It applies to passenger-carrying and property-carrying vehicles with:
- Two axles and gross vehicle weight (GVW) of 26,000 pounds or more
- A combination vehicle with a GVW of 26,000 pounds or more
- Tractor-trailer combo
- Light truck pulling a trailer
- Three or more axles, regardless of GVW
How Do I Get IFTA Stickers?
Apply for an IFTA license in your home base state or province. You only need one IFTA license for your fleet, but you'll need to request IFTA stickers for all of your trucks. For new applications, you'll need to provide:
- Registered business name
- Mailing address
- EIN or Federal Business Number
- DOT number
Your home jurisdiction may allow you to apply online. Otherwise, you can download and print the forms to mail in or fax. Check with your home state's tax assessor for instructions to apply for IFTA.
Can I Combine My IFTA Reporting If I'm Registered in More Than One Jurisdiction?
You can file under one IFTA jurisdiction (US State or Canadian Province) if you have all of your vehicles registered in the same jurisdiction.
If you have vehicles registered in more than one jurisdiction, you can combine your reporting to one jurisdiction. However, you must get approval from all affected jurisdictions.
You should also know that if one jurisdiction revokes your IFTA registration, it becomes invalid in the other states as well.
IFTA Exemptions and Waivers
There are some circumstances where you don't need IFTA registration.
Exempt Roads
Some jurisdictions may have roads that are exempt from fuel tax. Some examples are:
- Native American reservations
- Private roads
- Certain toll roads
Trip Permits
If you rarely leave one IFTA jurisdiction, you may get trip permits for a run into another state or province when needed.
Emergency Waivers
When states or provinces declare a state of emergency, they may waive fuel tax in their jurisdictions.
- Severe Weather Waivers
- COVID-19 Waivers
Biodiesel and Alternative Fuel
Some states may not tax biodiesel or alternative fuels, or tax them at a different rate. Texas, for example, does not tax biodiesel.
Suppose one of your trucks buys a B-20 biodiesel blend in Texas. Biofuels aren't taxed in Texas.
B-20 consists of 20% biofuel and 80% petroleum diesel. You'd pay IFTA tax to Texas for the 80% petroleum diesel, but the 20% biodiesel isn't taxed.
Final Thoughts
Even though IFTA makes fuel tax filing a lot simpler than it used to be, you can see that there are still a lot of moving parts.
If you're planning to build your own trucking company, you might want to invest in technology (such as software that integrates with GPS and geofencing) to help keep things straight.
At TrueNorth, we built our business on the principle that Owner-Ops should be able to maximize their profits. That's why owner-ops who contract with us keep the lion's share of revenues.
When you lease on with TrueNorth, we'll take care of your IFTA reporting and other administrative tasks while you concentrate on moving your truck(s) down the road.
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