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Glossary

IFTA

IFTA (International Fuel Tax Agreement) is a tax agreement between US states and Canadian provinces that simplifies fuel tax reporting for carriers operating across multiple jurisdictions.

What Is IFTA?

The International Fuel Tax Agreement (IFTA) is a system that simplifies how interstate carriers report and pay fuel taxes. Without IFTA, you would need to file separate fuel tax returns with every state you drive through. Instead, IFTA lets you file one quarterly return with your base state, which then distributes the appropriate taxes to each jurisdiction based on the miles you drove there.

To participate, you register for an IFTA license through your base state (where your trucks are based). You receive IFTA decals that must be displayed on your truck. Each quarter, you file a return reporting total miles driven in each state and total gallons of fuel purchased in each state. The system calculates whether you owe additional tax or are due a refund based on each state's fuel tax rate and your consumption.

IFTA returns are due by April 30, July 31, October 31, and January 31 for the preceding quarter. Late filing penalties are typically $50 or 10% of the tax due, whichever is greater, plus interest. Failure to file can result in revocation of your IFTA license, which means you cannot legally operate interstate until reinstated. Keeping accurate fuel receipts and mileage records is essential for accurate reporting.

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Why It Matters

IFTA compliance is mandatory for interstate operations. Late or inaccurate filing leads to penalties of $50+ per quarter and can result in license revocation. Proper IFTA management also reveals your actual fuel cost per mile, helping you evaluate which lanes are most profitable after fuel expenses.

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Real-World Example

Lisa runs a reefer between the Southeast and Midwest. In Q2, she drove 8,200 miles in Georgia (where diesel tax is $0.317/gal), 6,100 miles in Tennessee ($0.274/gal), and 4,500 miles in Kentucky ($0.246/gal). She bought most of her fuel in Georgia at $3.40/gal. Her IFTA return calculates she overpaid Georgia and owes small amounts to Tennessee and Kentucky. Her net IFTA payment: $47. FF Dispatch prepared the return for $75, saving Lisa 3-4 hours of calculations.
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How FF Dispatch Handles This

FF Dispatch offers IFTA reporting services for $75-$150/quarter. We compile your mileage and fuel data, calculate your liability, and file your return on time. This saves you hours of paperwork and eliminates the risk of late-filing penalties.

Related Terms

Operating Authority

Operating authority is the federal permission granted by the FMCSA that allows a company to operate as a for-hire carrier, broker, or freight forwarder in interstate commerce.

FMCSA

The Federal Motor Carrier Safety Administration is the US government agency that regulates the trucking industry, issues operating authority, and enforces safety standards.

Per Mile Rate

The per mile rate is the amount a carrier is paid for each mile driven on a load, and is the primary measure of load profitability in trucking.

Fuel Surcharge

A fuel surcharge is an additional per-mile charge added to the freight rate that adjusts for fluctuations in diesel fuel prices, protecting carriers from volatile fuel costs.

Dispatch Service

A dispatch service is a company that finds loads, negotiates rates, handles paperwork, and manages logistics for owner-operators in exchange for a percentage of the load revenue.

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Frequently Asked Questions

When are IFTA returns due?+
Quarterly: April 30 (Q1), July 31 (Q2), October 31 (Q3), and January 31 (Q4). Late filing incurs penalties of $50 or 10% of tax due, whichever is greater.
Do I need IFTA if I only drive in one state?+
No. IFTA is only required for qualified motor vehicles operating in two or more IFTA jurisdictions. If you only drive intrastate, you pay fuel tax directly to your state.
What records do I need to keep for IFTA?+
Keep all fuel receipts (showing gallons, price, date, location, and vehicle number) and maintain trip records showing miles driven in each state. Retain records for at least 4 years.

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