Just like with every other business, trucking companies are required to file for many taxes. Some of these taxes are tricky. For example, fuel taxes have to be filed quite precisely, but to count every receipt and mileage, you have to go through a lot of accounting. Even more ‒ you should also add mileage within states which your trucks crossed without stopping for refueling. This can be really difficult to track, but nevertheless, you have to do it ‒ and sometimes it’s easier to hire professionals for that rather than do it on your own.
This is why the International Fuel Tax Agreement exists ‒ an agreement between most of the United States and ten provinces of Canada ‒ exists. It allows tracking, collecting, and refunding fuel taxes for interstate carrier companies. To simplify, it works like that: a carrier fills an application for IFTA license Fleet Care, receives it, and once a quarter fills their fuel tax report. These reports are used to determine tax refunds and equally distribute tax funds among states.
With that in mind, quarterly reports should be as precise as possible ‒ this is the best way to assure your local jurisdiction won’t conduct a tax audit for you.
Every carrier with trucks that weigh more than 26000 pounds or have three or more axles should get an IFTA license to legally operate between states.
What are the choices for IFTA payments?
Every jurisdiction (county, state, or community one) can have their own payment choices for IFTA. In most cases, you can pay for your IFTA license and supplementary fees with a credit card, give a check, or pay with money order in any bank office.
You have to pay for:
- annual IFTA license;
- tax return fees every business quarter;
- other fees associated with tax filing and refunding.
In most cases, there are no problems with IFTA payments. Your best choice to learn more information about them in your community is to visit the local administration website. Or, you can just google “how to pay for IFTA + your state” ‒ for example, if you’re in Cali, the request will look like “how to pay for IFTA California”.
What acknowledgments will you receive?
Your IFTA license should be renewed annually. Every year, you have to update your credentials and apply for license renewal. With your annual license, you’ll also receive two decals ‒ these should be placed in the truck’s cabin both inside and outside it.
If you as a trucking company own multiple trucks, you should make copies of your IFTA license ‒ one for each truck registered under IFTA license.
Although the application process seems to be tiring, it can actually be done online on your local tax department website.
You can still have questions about the whole application process and IFTA tax filing. It’s OK ‒ while most questions are covered on jurisdiction websites, the answers might not seem complete. If you need any consultations about taxes for your trucking company, trusted fleet outsourcing companies like Fleet Care can help you out. Moreover, if you feel like figuring taxes out on your own is too much for you, you can easily hire professional tax accountants that specialize in the logistics industry. It’s easier to outsource them from companies who provide assistance to carriers rather than do an employee search on your own.