IFTA (short for the International Fuel Tax Agreement) is an agreement among US states and Canadian provinces. IFTA is designed to make fuel tax licensing and reporting requirements for interstate motor carriers easier. Furthermore, if you operate in two or more member provinces or states, you can register for IFTA and take advantage of everything it has to offer. Under IFTA, you will register with one state or province as your base jurisdiction and get a single fuel tax license for all of your vehicles that will be authorized to travel in all IFTA jurisdictions. In addition, you will only need to file one tax return each quarter with your home jurisdiction that will also audit your fuel tax records.
Under IFTA, you can travel in 48 US states and 10 Canadian provinces. They do not include Hawaii, Alaska and D.C. in the US and Nunavut, Northwest Territories and Yukon Territory in Canada.
It is not mandatory to register for IFTA but it is much more convenient to do so if you qualify. This way, you will avoid having to obtain a fuel permit from each member province or state every time you travel through them. To qualify, you must also have a vehicle that transports people or property for compensation and:
– has three or more axles
– has two axles and a registered gross vehicle weight of 26,000 pounds or more
– used in a combination that has a registered gross vehicle weight of 26,000 pounds or more.
Motor vehicles operated only for personal use are not qualified for IFTA registration.