We’ll mail you pre-printed quarterly IFTA tax returns which include barcoded information for active account holders. The transportation sector pays the most tax on fuel because fuel taxes are included in the price paid at the pump. Trucks, buses, and other vehicles in the sector use large amounts of fuel, so they contribute more to the taxes collected. You must stay updated on fuel tax rates to manage your personal and business expenses. my fuel tax As fuel tax rates increase and negatively impact fuel-intensive operations, you should monitor how these taxes affect your budget.
- The state tax on gas was $0.6982 per gallon and $0.9212 per gallon for diesel.
- Using Form , IFTA Fuel Tax Report Supplement (PDF), the total tax paid (Item L) gallons purchased should never exceed the total gallons consumed (Item D).
- Higher fuel prices increase the transportation expenses of daily commuters and families.
- Let’s start with the traditional and most time consuming method.
We know this process can be quite tedious and time consuming, so hopefully this article helped alleviate some headache. It is important that you understand the IFTA regulations clearly, and have a robust measurement and reporting process that is considered transparent and sufficient by their standards. Contact us today to lock in low rates and secure reliable fuel delivery for your business. Fuel taxes vary widely across states, with some having higher rates than others.
Federal tax revenues
- Diesel fuel taxes are higher than gas taxes because diesel vehicles use more roads and pay more for road maintenance.
- All bulk facility operators and importers must have a Petroleum Products Delivery Fee Permit.
- An IFTA audit will be required if there is an estimated tax reporting, bad or insufficient GPS data, and various other common issues.
- Once you submit your application, you’ll receive an IFTA license and decal for each vehicle that you operate.
As a result, you will have a mileage number for each time your truck entered a new state. You will need to keep track of how many miles were traveled in each state or province. Therefore, they raise the prices of their products or services to cover these operating expenses.
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However, some jurisdictions rule that fuel used by motor vehicles in farming operations is tax exempt. If this is the case of the jurisdiction in which the farmer is based, but is not the case in another member jurisdiction in which the farmer travels, the farmer should license under IFTA. While the operations for the base jurisdiction are exempt from taxation, the farmer will use the IFTA tax return to report and pay taxes to other jurisdictions in which he travels. State fuel taxes are taxes levied by individual states on the sale of fuel. The gas taxes by state differ from federal taxes because they vary from state to state.
Repeat until you’ve done this for all trips
During the audit, an IFTA representative will look over your fuel receipts and mileage records as a way of addressing problems within your quarterly report. Each of the vehicles listed above must use propane, natural gas, or diesel to meet the proper reporting and licensing requirements, but some jurisdictions are now requiring gas-powered vehicles to also be licensed. For example, if a driver fuels up in Colorado and travels to Kansas, Kansas will receive a portion of the taxes from the Colorado fuel purchase based on the miles driven in the state. If a driver purchases fuel in a state with a low tax rate and drives into a high tax rate state, they will most likely owe taxes at the end of the quarter.
The credentials issued by a licensee’s base jurisdiction allow that licensee to travel through all member jurisdictions without further licensing requirements. Each year, 1 license is issued to the licensee (such as your company). You may copy the license and place it in each vehicle operating under that license. One decal is to be placed on each side of each vehicle covered by the license.
Tax returns with payments
One of the biggest mistakes that you can make with your IFTA reporting is not submitting the report on time, meaning you’ve filed it too late. There are dates outlined by the IFTA officials that require your quarterly filings to be submitted by a certain date. Once you submit your application, you’ll receive an IFTA license and decal for each vehicle that you operate. After you’ve received your IFTA license, when fuel is purchased that amount is logged into your IFTA account. Every operator of a motor vehicle is required to submit an IFTA application.
A licensee has eight calendar quarters after the calendar quarter in which the credit is earned to either request a refund or use the credit to offset an IFTA tax liability. For example, if a credit accrues in the third quarter, 2018, the licensee has until Oct. 1, 2020, to request a refund or to apply the credit toward a liability. If we revoked your account, you’ll receive a letter with details and requirements. When reinstating an account, use the “reinstatement” link on your License Express account or fill out a new IFTA License Application. You must pay all outstanding amounts and returns in full and pay a $100 reinstatement fee.
What’s the best method to help me determine if I have all my paperwork together to apply for an IFTA license?
Many states have considered replacing their gas taxes with vehicle miles traveled (VMT) taxes instead, using actual miles driven as the metric for the user fee instead of gas consumed. If properly calibrated, this would eliminate the non-neutral treatment of vehicles with different fuel efficiencies, align roadway revenues to expenditures, and ensure that drivers are the ones paying for the roads in the future. You must obtain an IFTA license if you operate qualified motor vehicles in 2 or more member jurisdictions unless each qualified motor vehicle is operating under a 120-hour fuel permit. The calculator assumes consistent fuel efficiency across all travel and doesn’t take into account changes in terrain, load, or driving style.
It is presumed that biodiesel fuel/renewable diesel fuel and biodiesel/renewable diesel fuel blends are consumed in the jurisdiction where the fuel was purchased. Biodiesel fuel that is purchased in Texas and delivered into the fuel supply tank(s) of IFTA-licensed motor vehicles is considered consumed in Texas. Therefore, biodiesel fuel/renewable diesel fuel and biodiesel fuel/renewable diesel fuel blends purchased in Texas should be included in the tax paid gallons (Item L) for Texas. See Texas Administrative Code Rule 3.443, Diesel Fuel Tax Exemption for Water, Fuel Ethanol, Biodiesel, Renewable Diesel, and Biodiesel and Renewable Diesel Mixtures. IFTA licensees who overpay the tax on biodiesel fuel or biodiesel fuel blends by way of their IFTA tax return may request a refund from the Comptroller.
Quarterly Tax Returns
Use this IFTA calculator tool to accurately determine your fuel tax based on miles driven and fuel purchased across different states. The exact impact of Washington’s Climate Commitment Act is hotly debated, but Ecology officials and supporters of the program admit to about 27 cents of price increases. Oregon’s Clean Fuels Program was estimated to increase gas prices by 9.8 cents, and the Climate Protection Program will likely raise prices further once implemented. Whether implemented via a direct excise taxAn excise tax is a tax imposed on a specific good or activity. On carbon emissions, fuel standard mandates, a cap-and-trade system, or another environmental program, environmental taxes increase the price of gasoline.
At the very least, they must have someone do so on their behalf, like an accountant or office manager. It is an audit issue if the fuel card receipts do not identify the vehicle into which the fuel is delivered. A monthly summary of miles traveled and fuel consumed by each licensed vehicle is also required. The alternative to obtaining an IFTA license is to purchase a 120-hour fuel permit each time one of your vehicles engages in commercial motor vehicle transportation across state lines. Add up the number of gallons of fuel you’ve purchased in each state. It’s important to note that even if you don’t buy any fuel in a particular state that you need to include in your report, fuel tax will still be calculated.
Filing and paying quarterly fuel taxes
Higher fuel taxes push drivers and fleet owners to switch to alternative options to save money. They shift to hybrid or electric vehicles, which helps reduce pollution. In January 2024, consumers and businesses in California paid an astounding 68.1 cents per gallon in fuel taxes, the highest in the nation. Illinois followed closely with a tax rate of 66.5 cents per gallon.