Simplify IFTA tracking with fleet management software

Staying compliant with fuel tax regulations is essential for any fleet operating across state or national lines. While the International Fuel Tax Agreement, or IFTA, helps streamline these regulations, the IFTA tracking and reporting process can still be time-consuming and error-prone without the right systems in place.

Fleet management software offers a practical solution, helping fleets automate complex IFTA reporting tasks and stay ahead of compliance requirements.

What is IFTA?

IFTA is an agreement among the 48 continental U.S. states and 10 Canadian provinces that simplifies the reporting of fuel use taxes for commercial carriers that operate in more than one jurisdiction.

Before IFTA, drivers needed trip permits for every state they entered and fleet managers had to comply with varying reporting rules. Today, IFTA allows carriers to file one quarterly tax return with their base jurisdiction, which then distributes taxes owed to other states or provinces. This system reduces administrative burden and improves fuel tax compliance.¹

Who qualifies for an IFTA license?

You need an IFTA license if you operate a qualified motor vehicle across two or more IFTA jurisdictions. A qualified motor vehicle¹ is one that:

• Has three or more axles or
• Has two axles and a gross vehicle weight over 26,000 pounds (11,797 kilograms) or
• Is part of a combination that exceeds 26,000 pounds gross vehicle weight.

IFTA decals must be renewed annually, and licenses must be kept in vehicles at all times. Fleets must also be registered with the International Registration Plan (IRP) to qualify.²

Need help streamlining other compliance requirements? Learn about our native, customizable DVIR forms.

How IFTA reporting works

Carriers are responsible for submitting quarterly IFTA reports to their base jurisdiction. These reports must include total miles traveled, fuel purchased, and fuel tax paid in each IFTA jurisdiction. The base state processes the tax return, calculates the net tax due or refund owed, and handles payments with other jurisdictions.³

The process includes:

1. Applying for an IFTA license and decals.
2. Tracking all miles and fuel purchases per jurisdiction.
3. Filing a quarterly tax return.
4. Paying or receiving tax settlements.
5. Renewing licenses and decals annually.

Save time and simplify compliance with IFTA reporting software

While IFTA does help reduce the administrative burden of multi-state carriers and other fleets crossing jurisdictions, manual IFTA tracking still comes with challenges. Fleets must manage fuel receipts from multiple locations, calculate mileage per jurisdiction, stay updated on tax rates and prepare for audits.

Technology solutions like IFTA reporting software or IFTA tracking tools folded into fleet management platforms simplify and automate the entire process, reducing errors, saving time and eliminating many of these issues.

Through native tools inside the Reveal platform and integrations with third-party IFTA reporting platforms, fleet managers can streamline IFTA tracking and reporting.

• Automated mileage tracking: GPS-powered journey reports can calculate distance by state. Monitoring the routes drivers take and seeing miles-per-gallon calculations can help you develop more fuel-efficient routes as well.
• Fuel purchase integration: Sync with fuel cards to directly connect location and calculations for fuel purchase information, then relay this information to IFTA service providers through a file transfer protocol. This fully automated integration can decrease the possibility of human error on reports and make fuel efficiency reporting easier and more reliable.
• Report generation: Create and export accurate quarterly reports in IFTA-compliant formats.
• Audit support: Centralized, consistent records reduce audit stress and human error. Cloud-based storage and data export tools for simplified recordkeeping

IFTA reporting tools can integrate with other fleet management solutions such as ELDs (electronic logging devices), DVIR systems and accounting software.

Switching from manual reporting to IFTA reporting software and IFTA tracking tools can help your business stay compliant, reduce administrative costs and avoid penalties.

Want to learn more about how Verizon Connect can help? Request a free demo today.

Sources:

1. Arizona Department of Transportation Motor Vehicle Division

2. California Department of Tax and Fee Administration

3. South Carolina Legislature, The International Fuel Tax Agreement: What It Is and How It Works