Fuel Tax Reporting

Mistakes and omissions made in the completion of your IFTA reports, or late reporting of miles or fuel purchases, could put your company at risk of an audit. And if you’re audited, missing this information could result in penalties. Auditors can choose to recalculate reported taxes by dropping your reported miles per gallon by 20%, or by dropping the miles per gallon to 4.0 (a lower MPG means higher taxes), not to mention adding interest.

Vehicles that qualify for IRP and IFTA share the same characteristics and need to meet one of the following criteria:

• Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; 
• Has three or more axles regardless of the weight of the power unit; or
• Is used in combination with a trailer and the weight of such combination exceeds 26,000 pounds gross vehicle weight or registered gross vehicle weight. 

The International Registration Plan is an agreement that provides for the apportioned registration of commercial motor vehicles, allowing a qualifying commercial vehicle to travel through several jurisdictions with one license plate, provided the apportioned registration fees have been paid for each jurisdiction of travel shown on the cab card. The lower 48 states, the District of Columbia, and the 10 Canadian provinces are members of the organization.

Registration is based upon “apportioning” the fees, which means paying fees in proportion to the distance traveled in each jurisdiction. For example, if a carrier operates 70 percent of its miles in Wisconsin and 30 percent of its miles in Illinois, then 70 percent of the registration fees are paid to Wisconsin and 30 percent to Illinois. A carrier registers in a single base state or province (base jurisdiction). When you are apportioned, you must keep track of all mileage by jurisdiction using an individual vehicle mileage record (IVMR) or other electronic recording devices, such as GPS or electronic logging devices.

Most fleets tracking this information manually struggle with:

• Locating missing IVMRs and related data, including miles
• Compiling the miles in each state and province
• Accurately completing required forms
• Overlooking miles when totaling miles for each jurisdiction

Drivers must track and record all miles for IFTA-qualified vehicles and IRP-apportioned vehicles. This includes miles accumulated due to personal use, vehicle repairs, and yard moves. Some mileage exceptions exist for fuel tax purposes, but those miles must still be recorded. 

For example, miles accumulated on the Massachusetts turnpike are exempt from IFTA taxes. Other exceptions include off-highway or agricultural and forestry miles, but the exceptions are jurisdiction-specific. Carriers who think they’re eligible for exemptions should consult with the jurisdiction prior to claiming the exemption.