What is IFTA? IFTA stands for International Fuel Tax Agreement. It’s a cooperative agreement between U.S. states and Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction. This arrangement was introduced to create a systematic fuel tax collection within the framework of various IFTA member states. It makes reporting and the collection of fuel taxes simpler for drivers operating in various states jurisdiction. The fuel taxes in all 10 provinces of Canada and 48 states of United States are not the same. These fuel taxes diversify according to the place, so it is difficult for trucking company owners to file International Fuel Tax.
According to IFTA, trucking companies need to pay taxes to all states where these trucks are moved or conveyed. The taxes vary in various states and is calculated based on miles driven by a truck at any state. In days that are traditional trucking companies must rely upon the guide data maintained by motorists on daily basis. IFTA taxation was a nightmare for trucking company owners because they need to depend upon the data given by the drivers. They must keep the track of all trucking receipts for their fleet it was time-consuming process. In a case if any mistake is made by owners or by drivers, the odds of error on your fuel tax reporting could cause completely new set of worries. Therefore, minimize and to automate errors while reporting and calculating IFTA Fuel Tax manually, some companies came up with a customized software application. These IFTA fuel tax reporting software were developed to deal with all tasks associated with reporting, filing and calculating IFTA Fuel Tax.
With the progress of these software the process of IFTa reporting has become easier and match of few mouse clicks. All carriers with IFTA accounts are required to deposit quarterly fuel tax reports. All the carriers within a single IFTA account must be combined into a single report to file. Vehicles with same IFTA accounts cannot file taxes. This report must list all the number of miles travelled within each jurisdiction and gallons purchased. A zero performance record must still be submitted on the vehicle in a case if the vehicle in a fleet isn’t used at all in a quarter. As carrier vehicles buy fuel, the state taxes on the fuel are credited to the IFTA account. Therefore, a vehicle driver and trucking business owner need to keep the track of fuel tax receipts very carefully because in case if the taxes are not paid in time or if they aren’t paid accurate than penalties are being imposed on them. Rather than paying fees to get tax reporting now you can use automated programs to handle your trucking business without difficulty.