IFTA Reporting Explained, and How to Ensure It’s Correct

There are many people in the motor carrier or trucking industry that claim they know how to properly do an IFTA quarterly report.

However, in our experience, we have found that if you are not an IFTA auditor with many years of experience then you will have to learn and keep up with all IFTA requirements and jurisdictions’ IFTA regulations.

Way too many motor carrier companies today still do not understand the impact of incorrect fuel tax data for IFTA. It can lead to the worst-case scenario, which is suspension, but the immediate effects can be: paying higher fuel taxes quarterly, increased fees for plate registration or IRP and insurance premiums. All of it resulting in higher operation costs for motor carrier businesses.

Think of when you had a painful toothache that needed more than over-the-counter tooth medication. You didn’t run to your general doctor. Instead you went to a dentist to get your tooth issue resolved. So you end up going to a specialist in a particular area when needed.

Well-built IFTA software programs that specialize only in IFTA compliance are like those specialists, but without such high fees.

When it comes to doing your IFTA reporting correctly, why not use a tool like a software program that has been built to follow IFTA compliance and updates itself on an ongoing basis, to keep up with compliance and trucking industry legislation – and ALSO updates based on user feedback?

Through the years we have learned what you must do to make sure your IFTA quarterly reports are correct. Whether you keep track of your mileage and fuel data manually or with the help of electronic devices we have prepared a list of tips you should follow to keep you away from an audit.

According to Fuel Tax regulations, you are required to keep all records to prove the information on your fuel tax return. These records must be kept for a period of 4 years from the date the return was filed. If you do not keep proper records of your fuel tax information that proves your fuel tax returns or IFTA reports then it may result in revocation or suspension of your IFTA license.

Here is our list of tips you should follow to make sure your IFTA reporting is correct:

  • Use odometer readings – if your GPS or ELD keeps track of your odometer readings then use them for calculating your mileage. Odometer readings are the best way to prove to IFTA people that you drove the mileage you have filed.
  • Report all mileage including moves around the yard, driving to the mechanic, and personal use.
  • Report a consistent MPG – the driver of a truck knows the average miles per gallon or MPG of his or her truck. So make sure that the MPG in your report is similar to the one your driver knows and it is consistent from quarter to quarter. Your MPG for semi trucks should fall within a range of  4 and 8 MPG.
  • Keep detailed distance records to document all miles travel for each vehicle. These records should at least include: date of trip (start and ending), trip origin and destination, beginning and ending odometer readings, total trip miles, and miles per jurisdiction including jurisdictional border crossing odometer readings or routes of travel.
  • Do not estimate fuel – use your actual fuel from fuel receipts you purchased or fuel records of fuel purchases from your fuel card. Keep your paper fuel receipts organized and enter them in a program or put them in an electronic format.
  • Separate your fuel types if you use others fuels than only diesel.  Also retail fuel purchases and bulk fuel purchases are to be accounted for separately. Reefer fuel is not required for IFTA.
  • Keep detailed records of your retail fuel purchases for each vehicle. These records should at least include: date of purchase, fuel station’s information (name, town/city, and state or province),  number of gallons or liters, fuel type, price per gallon or liter, and vehicle number.
  • Keep the following detailed records for your bulk fuel: copies of all delivery tickets and/or receipts including the fuel tax paid to the jurisdiction where bulk tank is located, bulk fuel inventory reconciliation including disbursement for both qualified and nonqualified vehicles, records of withdrawal identifying the number of gallons or liters and vehicle number and odometer reading at time of fueling.
  • Do not wait until the last minute – keep on top of your fuel tax information and enter it in a fuel tax program frequently. The more often you work with this data the less time overall you will spend each quarter because you will make less mistakes, avoid misplacing information, and will be able to edit any errors.
  • When you are reviewing your report, remember that you cannot have purchased fuel in a state or province without having any mileage in that state or province. For example, if you are based in St. Paul, Minneapolis and your motor carrier company travels or does interstate commerce on the Jefferson Highway (this highway goes north and south from Winnipeg, Manitoba Canada to New Orleans, Louisiana) and you find yourselves with fuel receipts for Oklahoma but with no mileage for Oklahoma in your fuel tax report then you should know right away that you are missing the miles for Oklahoma.
  • Do self-audits or review your fuel tax data before you submit.
  • Use a software program that has been well-built for IFTA reporting, follows all IFTA compliance, and keeps up with IFTA and legislation changes. Use eTruxFuel!

We want to make IFTA reports and other fuel tax reports easy for you. Why not take advantage of our 31-day free trial?