International Fuel Tax Agreement (IFTA):
What is the purpose of the International Fuel Tax Agreement (IFTA)?
The purpose of this Agreement is to promote and encourage the fullest and most efficient possible use of the highway system by making uniform the administration of motor fuels use taxation laws with respect to motor vehicles operated in multiple member jurisdictions.
Enable participating jurisdictions to act cooperatively and provide mutual assistance in the administration and collection of motor fuels use taxes.
Establish and maintain the concept of one fuel use license and administering base jurisdiction for each licensee and to provide that a licensee's base jurisdiction will be the administrator of this Agreement and execute all its provisions with respect to such licensee.
What does this mean for me as a carrier?
States collect taxes on the motor fuel used within their borders to build and maintain the roads and highways that link their communities to each other and the rest of the nation. As an interstate motor carrier traveling in Kansas, you pay your share of these taxes according to the provisions of the International Fuel Tax Agreement (IFTA). This agreement, recognized by 58 states and provinces, simplifies the way you report and pay fuel taxes, reduces paperwork and minimizes compliance requirements.
Specifically, Kansas participation in IFTA means that:
· A single fuel tax license authorizes you to travel in all IFTA member jurisdictions;
· A single tax return fulfills your reporting requirements for all member jurisdictions;
· A single state usually performs your fuel tax audit.
The following jurisdictions are current IFTA members:
|Alabama||Kansas||New Hampshire||Rhode Island|
|Arizona||Louisiana||New Mexico||South Carolina|
|Arkansas||Maine||New York||South Dakota|
|Indiana||Nevada||Prince Edward Island|| |
|Iowa||New Brunswick||Quebec|| |
What are the requirements for an International Fuel Tax Agreement (IFTA)?
Any person based in a member jurisdiction operating a qualified motor vehicle(s) in two or more member jurisdictions.
Qualified Motor Vehicle means a motor vehicle used, designed, or maintained for transportation of persons or property and:
· Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or
· Having three or more axles regardless of weight; or,
· Is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight.
(Recreational vehicles such as motor homes, pickup trucks with attached campers, and buses when used exclusively for personal pleasure by an individual. In order to qualify as a recreational vehicle, the vehicle shall not be used in connection with any business endeavor.)
Qualified Motor Vehicle does not include recreational vehicles.
What member jurisdiction must I obtain my IFTA license in?
The member jurisdiction where the qualified motor vehicles are based for vehicle registration purposes and
· Where the operational control and operational records of the licensee’s qualified motor vehicles are maintained or can be made available; and
· Where some travel is accrued by qualified motor vehicles within the fleet.
The commissioners of two or more affected jurisdictions may allow a person to consolidate several fleets that would otherwise be based in two or more jurisdictions.
If you have fleets in more than one jurisdiction and want more information on consolidating your fleets under one base jurisdiction call the Kansas Department of Revenue IFTA section.
“Base Jurisdiction,” establishes the jurisdiction to which a carrier will make fuel tax payments. Your base jurisdiction will then distribute the appropriate amount of tax owed to each IFTA member jurisdiction for you.
Kansas will be your base jurisdiction if:
· You have IFTA qualified vehicle(s) registered in Kansas;
· Your vehicle(s) use is controlled from a physical location in Kansas;
· Your vehicle(s) records are maintained or can be made available at a physical location in Kansas; and
· At least one of your vehicles travels some miles within Kansas.
What would be a reason my license would not be issued?
A license will not be issued if the applicant has been previously licensed under this Agreement and that license is still under revocation by any member jurisdiction or the application contains any misrepresentation, misstatements, or omission of information required in the application.
If I do not have an IFTA license and have a qualified motor vehicle traveling through a member jurisdiction what do I need to do?
In lieu of obtaining an IFTA license, you may satisfy motor fuels use tax obligations on a trip-by-trip basis in each jurisdiction you are traveling in. You can purchase a Trip
Permit at any Motor Carrier Inspection Station along the jurisdiction border or through the Central Permit Office (785) 271-3145.
Must I reapply each year for an IFTA license?
Yes, you will be mailed a renewal application prior to the expiration of your current credentials.
I currently have an active IFTA license and I am adding another vehicle to my fleet what can I do?
Kansas will issue a 30-day IFTA temporary permit valid for all member jurisdictions to carry in lieu of displaying the annual decals. A temporary decal permit will only be issued to a licensee in good standing. It will be vehicle specific, and you are only allowed one per vehicle. You will need to make sure you have a copy of your IFTA license in the vehicle along with this temporary decal permit.
You will need to purchase an additional decal before your 30-day temporary permit expires.
Are there any reporting requirements to the base jurisdiction?
The licensee shall file a calendar quarterly return with the base jurisdiction and shall pay all taxes due and included with the return. Tax returns are required even if no operations were conducted or no taxable fuel was used during the reporting period.
Tax Return, and full payment of taxes, shall be due on the last day of the month following the close of the reporting period for which the return is due. If the last day of the month falls on a Saturday, Sunday, or legal holiday, the next business day shall be considered the final filing date.
What is the date that my IFTA return & payment must be filed by?
IFTA Return Due Dates
January through March: April 30th
April through June: July 31st
July through September: October 31st
October through December: January 31st
When is penalty and interest assessed?
Penalty of $50.00 or 10 percent of delinquent taxes, whichever is greater. Penalty will be assessed when failing to file a return, filing a late return, or underpaying taxes due.
Interest shall be assessed at the rate of one (1) percent per month, on all delinquent taxes due to each jurisdiction.
How are credit balances taken care of?
You may request a refund of your credit balances of $10.00 or more by checking the box on the front of your IFTA return form 85. If the box is not marked, the credit balance will be applied to your next return. Credit balances cannot be carried for more than eight quarters (two years) from the date established.
What if I do not file my IFTA quarterly report?
Failure to file your quarterly fuel tax report will result in the Revocation of your carrier’s IFTA license. To reinstate the license, a bond must be posted in addition to paying delinquent taxes, penalties, and interest.
What are some of the reasons my license could be revoked?
Your IFTA license may be revoked for any of the following reasons:
· Failure to file a quarterly IFTA report;
· Failure to pay tax due to all member jurisdictions;
· Failure to adhere to record-keeping requirements, and;
· Failure to pay or appeal an audit assessment within the established time period; li>Failure to post a bond when required; and
· Failure to remit payment to cover insufficient funds.
What does it take to get my license reinstated?
To reinstate your IFTA license after being revoked you must:
· Pay all taxes in full;
· File all required reports;
· Submit any records requested;
· File a new application;
· Pay registration fee ($10.00 for the 1st set of decals and $1.00 for each additional set); and
· Post a bond to cover 3 quarters tax liability but not less than $1,000.00.
Is there anything I need to do for IFTA if I go out of business or no longer leave the State of Kansas?
Yes, you may cancel your IFTA license at any time, provided all reporting requirements and tax liabilities to all member jurisdictions have been satisfied. To surrender your license you need to sign and date the bottom of the license and mark the quarter you want the license surrendered. You must remove the IFTA decals from vehicles, and return the license, all unused decals, and any part of the decals that have been removed from the vehicles to the Kansas Department of Revenue IFTA office. A final audit may be conducted by any member jurisdiction upon cancellation. The records must be retained for four years after the due date of the final quarterly tax report.
If your license was misplaced or destroyed, you will need to submit a statement of what has happened to the license and decals. Include your name and phone number so the IFTA office may contact you if there is any additional information needed.
What if I leave the decals on my vehicle after my license has been surrendered or revoked?
You will be subject to all appropriate penalties if you are found traveling on a surrendered/revoked license and or decals.
Are there any record keeping requirements with this license?
Yes, every licensee shall maintain detailed records to substantiate information reported on the quarterly tax returns. You must maintain your records for a period of 4 years. For details of record keeping refer to the IFTA Article of Agreement Manual at http://www.ksrevenue.org/bustaxtypesmf.htm.
Are the mileage record keeping requirements similar for both IFTA and IRP?
Yes, the required elements include:
· START and END date of trip;
· Trip origin and destination;
When a trip includes more than one stop, (multiple destinations) the added stops should also be recorded;
· Route of travel;
· Beginning and ending odometer readings;
Total trip miles - IFTA and IRP require reporting all miles the unit travels;
· Total miles must include loaded and deadhead miles, and any local miles when the unit is taken for servicing.
· Miles in each jurisdiction;
· Unit number or vin;
· Fleet number;
· Registrant’s name.
In addition, IFTA specifies the records MUST include distance data on each vehicle for each trip and be included in monthly fleet summaries.
Regardless of the mileage documentation form used, it must include all of the elements listed above.
What would be considered an acceptable fuel receipt?
An acceptable receipt or invoice must include, but shall not be limited to the following:
· Date of purchase;
· Seller’s name and address;
· Number of gallons or liters purchased;
· Fuel type;
· Price per gallon or liter or total amount of sale;
· Unit numbers.
Purchaser’s name (in case of a lessee/lessor agreement, receipts will be accepted in either name, provided a legal connection can be made to the reporting party.)
I have an on board computer system, what are the record keeping requirements?
See the following information from the IFTA Procedures Manual.
OPTIONAL USE FOR FUEL TAX REPORTING
On-board recording devices, vehicle tracking systems, or other electronic data recording systems may be used (at the option of the carrier) in lieu of or in addition to handwritten trip reports for tax reporting. Other equipment monitoring devices that transmit data or may be interrogated as to vehicle location or travel may be used to supplement or verify handwritten or electronically-generated trip reports.
Any device or electronic system used in conjunction with a device shall meet the requirements stated in this Section.
On-board recording or vehicle tracking devices may be used in conjunction with manual systems or in conjunction with computer systems.
DEVICES USED WITH MANUAL SYSTEMS
All recording devices must meet the requirements stated in IFTA Procedures Manual Section P640 and P660.
When the device is to be used alone, printed reports must be produced which replace handwritten trip reports. The printed trip reports shall be retained for audit. Vehicle and fleet summaries which show miles and kilometers by jurisdiction must then be prepared manually.
For further detailed requirements please reference the IFTA Procedures Manual located on the IFTA web-site www.iftach.org
Are you allowed to claim fuel pulled from bulk storage?
Yes, to obtain credit for withdrawals from licensee-owned tax paid bulk storage, the following records must be maintained.
· Date of withdrawal;
· Number of gallons or liters;
· Fuel type;
· Unit number;
· Purchase and inventory records to substantiate that tax were paid on all bulk purchases.
Can I expect to be audited?
Yes, all IFTA carriers based in Kansas are subject to audit. Kansas is required to audit 3% of their base jurisdictions licensee’s every year.
Licensees selected for an audit will be contacted in writing 30 days prior to the audit date. The auditor(s) will notify the licensee of the time period to be audited and the records to be reviewed.
After the audit, the licensee will be advised of the audit findings, including adjustments to fuel tax liabilities for affected jurisdictions, and suggestions for record-keeping improvements. The other member jurisdictions affected will be notified of the results. The licensee may be subject to a supplemental audit if any member jurisdiction disagrees with the audit results.
Do I have any appeal rights for my audit?
Yes, if you do not agree with your audit findings you may request an informal conference from the Secretary of Revenue. To request an informal conference, please send a written request, stating the reasons for your objections along with a copy of the audit notice. In order to preserve your appeal rights you must request a conference within 30 days of the date of the letter. Send your request to: Office of administrative Appeals, Kansas Department of Revenue 915 SW Harrison ST., Topeka KS 66625-0001.
Once we review your request, we will contact you to schedule the informal conference. If possible, the conference will be held over the telephone to save you time and travel expense.