Not very long ago, fuel taxes with multiple jurisdictions used to be a lot more complicated for motor carriers. Before IFTA, you had to get decals for each jurisdiction you traveled, and report based on each jurisdictions rules and regulations.
Now under IFTA, collected taxes are distributed to all jurisdictions you traveled through, by your base jurisdiction. Your IFTA report must be completed on a quarterly basis with the jurisdiction where your motor vehicle is registered, or your base jurisdiction.
Quarterly reports are required. However, there are two other reports you can generate to get insight on your fuel tax expense and how it affects your operations. These are the monthly reports and per-truck reports.
Here is why all these reports are important:
Quarterly Fuel Tax Report
Why is it important to file your quarterly IFTA report?
IFTA Penalties
Late penalties are not only hard on your cash flow, but also raise a red flag for auditors. You can expect a $50 late fee or 10% of your net tax liability (whichever is greater). In addition to the late filing penalty, an accumulative 0.6% penalty is also due to each jurisdiction traveled where you owed fuel taxes, for every month that your IFTA report is late, until you pay what is owed in full. So it is worth filing your IFTA report on time.
Not worried about paying late fees?
That’s fine if you have the extra cash on hand to pay late fees, but you are giving auditors a reason to look at you. Another risk is that your base jurisdiction holds the right to revoke your IFTA license, although this doesn’t happen often. If you have a revoked IFTA license you will no longer be able to travel inter-jurisdictionally.
If you have not paid your outstanding IFTA amount in full when it comes time for a new IFTA license, your jurisdiction can withhold the license until you have paid.
Avoid the IFTA Audit
An audit is feared by many, and it is certainly extra paperwork you do not need. All jurisdictions are required to audit 3% of the IFTA licensees each quarter, to ensure accurate information is being filed. Auditors are on the watch to catch irregularities of information.
What if all information is submitted correctly, but you are randomly chosen and audited for IFTA reports? Using a program like eTrucks will neatly organize your fuel records and mileage records in one place. It will also help you identify if there are irregularities in your fuel tax data, by looking at the MPG of each truck, or reviewing your data that is neatly organized in our program’s format. You can easily access any report and run multiple reports based on your needs or the auditor’s needs. It will minimize your risks and make it easier to avoid having to pay penalties.
Individual Vehicle Report
If your company has more than 2 trucks, it is important to use a program that provides you with individual vehicle mileage & fuel reports. These reports are necessary for your business operations, and to pay IFTA balances of individual trucks if you hire owner-operators in your fleet. In these reports you will see:
* The various fuel tax balances for each truck
* Miles drove in each jurisdiction for individual trucks
* Gallons purchased in each jurisdiction for each truck
If you were to break down the IFTA report per truck and add up the totals of each truck, you can compare that number to your company IFTA report total. You may notice that adding the totals per truck might be different than the total of the company as a whole. This is dependent on the miles per gallon (mpg) of each truck. The mpg of each truck might vary depending on the loads each truck is hauling, the roads they are driving on, and the weather conditions.
This report not only gives you an understanding of how each truck is mechanically running compared to the others through the mpg, but lets you compare the IFTA totals of each truck based on fuel tax rates and gas prices of the jurisdictions each truck has gone through. For example, if one of your trucks has worse miles per gallon and you purchased more fuel in a state where the fuel tax rate is lower, that truck will most likely be paying more IFTA.
Monthly Reports
I already have my quarterly IFTA return in place, so why would I need a monthly report? By running monthly reports you can see:
* How many miles or gallons did a truck run or purchase in a month?
* Is the truck running better this month than last month?
* Is one truck running better this month than the other truck(s)?
* Did one month have a better return than the other?
These questions can dig deeper into how you can save money, maintain your trucks better, and it makes you pay attention to changes each month. The answers can lead you to make important decisions for your operations and by adding the monthly total mileages for each jurisdiction, you have your IRP annual report completed.
eTrucks generates all three reports with a click of a button once you have entered your miles and fuel data.
eTrucks can even take care of other highway-related taxes, such as New York’s highway use tax.
