IFTA and Compliance


IFTA Software

Do your trucks operate across state/provincial lines? Then you already know about the International Fuel Tax Agreement (IFTA). But how does Titan GPS help? 


A simple way to define the IFTA is a “pay now or pay later” system. When purchasing fuel, tax credits are applied to the account of the license owner, this should happen during every fuel up and in every state/province (excluding Northwest Territories, Alaska, and Hawaii). Every fiscal quarter drivers must submit a fuel tax return to their jurisdiction under which they are registered. After which, the taxes are distributed equitably to each jurisdiction.

Functionally, the IFTA is different for each participant. If you’re a member of the state/provincial auditing team then the IFTA represent taxes you collect and distribute. If you’re a fleet manager then the IFTA is a regulatory guideline and represents more bills to pay and more paperwork to file. For drivers, it’s simply a sticker you need to put on your window in case your truck gets inspected.

As it stands, the whole IFTA framework operates on a kind of honor system. An expectation that states/provinces will audit 3% of carriers to ensure they are complying with IFTA standards. Western Canadian provinces have a great record of following through with this expectation. However, states and provinces that are large and have a high population density like California, New York and Ontario struggle to keep up, and in some cases have historically not performed any audits at all. 3% doesn’t sound like a lot, but in Alberta, that’s roughly 100 or so in-depth audits, and it is very realistic that your fleet could be the next target for an audit. That’s why ensuring your fuel billing is up-to-date and accurate is paramount.


IFTA Reports


To file correct IFTA reports you will need a few things :

  • Total mileage traveled for each jurisdiction
  • Total amount of fuel consumed per jurisdiction
  • Tax paid on all purchases
  • The current fuel tax rate per jurisdiction

Unfortunately, the penalties for not filing this information by the quarterly deadline can result in significant penalties. For filing late, drivers/carriers will face a 10% penalty for taxes owed or $50, depending on which is greater. Additionally, if there are taxes owed and they are not paid by the deadline then drivers/carriers will be charged 0.4167% of the total taxes owed, which is accrued. And finally, the state/province has the right to revoke an IFTA license, which would mean the truck cannot operate. However, we’ve heard that this typically only happens when there are multiple violations


If you’ve had troubles preparing your IFTA reports, Titan GPS can help. Apart from that, we can help optimize your fleet via fleet tracking, Electronic Logging Devices (ELDs) and equipment/asset tracking.