International Fuel tax Agreement

International Fuel Tax Agreement (IFTA)


IFTA is a Fuel tax agreement between 48 States of USA and 10 Provinces of Canada so that it will make easy for commercial vehicles to license, report and pay their fuel taxes. Canadian territories, US states Alaska and Hawaii are not included in this agreement. IFTA simplifies fuel tax payments for those commercial vehicles which travels through more than one state or member province 

 

Benefits of IFTA

 

Following are the key features or benefits of IFTA:

 

  • A single fuel tax license and decals (sticker that has printed number) that authorize Commercial Vehicles to travel in all member Province / Jurisdiction without requiring the purchase of fuel trip permits.
  • A single IFTA fuel tax return that details all the operations in each of the member Province / jurisdictions.
  • One member  province or State collects fuel tax and distribute all the taxes to member State / provinces
  • Ability to remit one cheque or receive one refund from base jurisdiction.

 

Registered with IFTA?

 

Any person in a member Province/ State of IFTA who operates a qualified motor vehicle(s) in two or more member Province/ State must have to register with IFTA for fuel tax purpose.

 

IFTA Ontario

 

Any person who has permanent place of establishment in Ontario who operates qualified CMV(s) with Ontario Plate in two or more member Province/ State must have to register with IFTA Ontario for fuel tax purpose.

 

Advantage of IFTA Ontario

 

Main advantage of IFTA for registered members is that it requires only one license to operate in all the member States / Provinces of Canada.

 

For example: If a person is registered with IFTA Ontario and his vehicles operates in any of the member States / Provinces then he has to pay his fuel tax to the base jurisdiction. IFTA Ontario will then collect these taxes and distribute them to all other member States / Provinces.

 

Registered with IFTA Ontario?

 

If the following conditions are met then it is required to register with IFTA Ontario

 

  1. If commercial vehicle has equal or more than 3 axles or its weight is more than 11797 Kg /26000 lbs (vehicle or Vehicle + trailer)
  2. If a person has permanent business place in Ontario
  3. If Commercial Vehicle(s) travel in Ontario and any of the member States / Provinces.

 

When to Report and Remit Taxes

 

Fuel tax returns must be filled each Quarter in within due date to avoid penalty. Due date is usually after at least 30 days of the end of the each Quarter but if last date to file return comes on any public holiday then next business day will be the last day to file fuel tax return.

 

  • January - March: Due Date April 30
  • April - June: Due Date July 31
  • July - September: Due Date October 31
  • October - December: Due Date January 31

 

 

 

 

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