A fleet should follow various policies and guidelines that regulate the roadways to continue the business. The majority of carriers assign compliance to their fleet operators. It covers licensing, USDOT registration, following-hour shifts standards, material laws, and most importantly the International Fuel Tax Agreement (IFTA). This article will shed light on all aspects of IFTA and will guide you how to report it on quarterly basis.
What is IFTA?
The International Fuel Tax Agreement (IFTA) is a deal between states in the USA and provinces in Canada. It makes paying vehicle fuel consumption taxes easier. The people who drive eligible automobiles require an IFTA license.
It unites 48 USA states and ten Canadian provinces. A ‘member jurisdiction’ refers to each state or province. IFTA requires Inter-jurisdictional operators to report the quantity of motor fuel utilized and the miles driven within every state. Your “base jurisdiction” is the state where you obtained your IFTA cards.
Fuel tax payments across member nations are now standardized and efficient due to IFTA. This Fuel tax is estimated to save trucking companies millions of dollars in operational expenditures each year.
How does IFTA work?
A vehicle, that is IFTA licensed, receives a fuel tax authorization from one state under this arrangement. The taxes on fuel sold in either partnering state or province is paid to the license owner’s account whenever the vehicle travels through that province or state. The report on the fuel tax is written just at the end of each quarter. It shows the mileage and liters of fuel for every zone.
IFTA helps in estimating the tax payable or tax deduction for each state. It determines every state’s fuel tax responsibility and ensures the distribution of funds appropriately.
Who Needs IFTA?
IFTA-certified commercial vehicles that carry products or people and have three two axles with a gross weight of over 26,000 pounds or 11,797 kilograms.
These vehicles have to be driven in at least one or two U.S. states and Canadian provinces that are part of the IFTA to qualify for it. A “qualified motor vehicle” is defined under IFTA as manufactured and utilized to convey goods or persons. You will also need IFTA if you drive the vehicle from a company located in Illinois. You will need it to either maintain the car data in Illinois or make them accessible to the Illinois Department of Revenue.
The deal contains all ten provinces of Canada and the 48 neighboring states of the United States. Hawaii and Alaska are still not organizational members. When used only for personal enjoyment, a recreation vehicle and vehicles utilized in a business aren’t regarded as leisure.
How to do IFTA Quarterly Reports in Illinois?
It’s a straightforward thing that if you run a transportation firm, carry goods, and buy fuel to transport those goods; you owe taxes on fuel. That implies you’ll have to submit IFTA reports every quarter. You can access your IFTA account at MyTax Illinois. If you’re having trouble with it, we at myNITS, have a solution for these questions regarding how much you’ll require, whom you can acquire it from, what the deadlines are, or how to file.
Things You Need for the IFTA Quarterly Tax Report:
You’ll need the following essential materials to know that how to do IFTA quarterly report:
1. Fuel Receipts:
Detailed overall fuel tanks bought for every 48 states in the U.S. and ten provinces in Canada, comprising a type of fuel, date of purchase, purchase area, the cost for every tank, truck registration number, amount of tanks bought, and overall number.
2. Mileage Records:
Record your mileage within every state or province, including overall miles, every visit, and per authority.
3. Trip Reports:
Trip reports should include the start and finish dates of the trip and travel routes, and the trip’s arrival and departure.
Most of the Petrol Pump Companies send a quarterly report to all customers, highlighting any fuel, refrigerated fuel, or biofuel transactions. They add up the entire sales volume, quantities, and costs, then divides them by region. Submitting IFTA fuel excise reports involves the collection of these transaction records. You can read more about these requirements on Website of Illinois Department of Transportation.
Where to Find IFTA Rates?
The applicable fuel tax rates are required to compute tax on fuel for every state or province. The International Fuel Tax Association defines IFTA quarterly fuel tax schedule and jurisdiction. Remember that your IFTA taxable miles are generally your overall miles traveled within every state or country. However, some jurisdictions grant mileage exclusions that aren’t taxed. Every member state determines its rate of tax. IFTA Inc has tax rates for the current and previous years.
Quarterly, or four times a year, IFTA reports are needed. Each quarter, the deadline for submitting your IFTA report is the last day of the month after the calendar quarter’s end. Reports are due the following business day if that day would be a Sunday, Saturday, or public holiday.
So, in 2022, IFTA tax due dates for Illinois are:
1- The deadline for the 1st quarter (January to March) is April 30th
2- The deadline for the 2nd quarter (April to June) is July 31st
3- The deadline for the 3rd quarter (July to September) is October 31st
4- The deadline for the 4th quarter (October to December) is January 31st, 2022
You will require to pay extra charges as a penalty if you pay beyond the IFTA tax due dates. Every year on December 31st, IFTA decals expire. Carriers must re-register by the end of February the following year.
According to a provision inside the advisable to ensure “fuel tax equalization”, one or both of the states you travel through may pay you a return. Keep thorough and exact records of the miles traveled in each state. Also, remember the quantity of fuel spent within each to get any returns owed to you.
How to File IFTA Online?
You may use e-services like ExpressTruckTax, Web file, or EDI software to submit your IFTA quarterly fuel tax schedule reports online. If you are from Illinois, you may also file IFTA reports by accessing MyTax Illinois if you already have created account. You can consult the myNITS advisor any time at any stage of reporting your IFTA quarterly taxes.