IFTA Record Keeping for Beginners: A Trucker's Guide

Understanding IFTA: A Quick Overview

The International Fuel Tax Agreement (IFTA) is an agreement between the 48 contiguous states of the United States and the ten provinces of Canada to simplify the reporting of fuel taxes by interstate motor carriers. Simply put, it allows you to register in your base jurisdiction and file one quarterly fuel tax return, rather than filing separate returns in each jurisdiction where you operate. This guide is designed for owner-operators and truck drivers new to IFTA, providing a foundational understanding of record keeping requirements.

Who Needs to File IFTA?

You are required to file IFTA if you operate a qualified motor vehicle. A qualified motor vehicle is one that is:

• Used, designed, or maintained for the transportation of persons or property
• Has two axles and a gross vehicle weight (GVW) or registered GVW exceeding 26,000 pounds (11,797 kilograms); OR
• Has three or more axles regardless of weight; OR
• Is used in combination, when the weight of such combination exceeds 26,000 pounds (11,797 kilograms).

Note: Recreational vehicles are typically exempt from IFTA unless used in connection with a business.

Essential IFTA Records: What You Need to Keep

Accurate and detailed record keeping is the cornerstone of IFTA compliance. Here's a breakdown of the essential records you need to maintain:

1. Mileage Records (Trip Reports)

Your mileage records are crucial for calculating the distance traveled in each jurisdiction. These records should include:

• Date of Trip: The day the trip started.
• Origin and Destination: Starting and ending points of the trip.
• Route of Travel: Highways or roads used.
• Total Distance Traveled: The total miles/kilometers for the trip.
• Distance Traveled in Each Jurisdiction: Breakdown of miles/kilometers driven in each state or province.
• Vehicle Identification Number (VIN): Your truck's VIN.
• Driver's Name: The name of the driver operating the vehicle.

Many drivers use Electronic Logging Devices (ELDs) or GPS tracking systems to automatically record mileage. While convenient, it's essential to verify the accuracy of these records.

2. Fuel Purchase Records (Fuel Receipts)

You need to keep detailed records of all fuel purchases. Each fuel receipt should include:

• Date of Purchase: The date the fuel was purchased.
• Seller's Name and Address: The name and address of the fuel vendor.
• Quantity of Fuel Purchased: The number of gallons or liters purchased.
• Fuel Type: The type of fuel (e.g., diesel, gasoline).
• Price per Gallon/Liter: The cost of fuel per unit.
• Total Purchase Price: The total amount paid for the fuel.
• Vehicle Identification Number (VIN): Your truck's VIN.
• Purchaser's Name: Your name or the company name.

Keep all original fuel receipts. Scanned copies or digital images are often accepted, but it's always best to have the original.

Best Practices for IFTA Record Keeping

Here are some tips to help you maintain accurate and organized IFTA records:

• Keep Records Organized: Develop a system for organizing your mileage and fuel records. Consider using folders, binders, or digital tools.
• Record Information Immediately: Don't wait until the last minute to record your mileage and fuel purchases. Enter the data as soon as possible after each trip and fuel stop.
• Use Technology: Explore trucking software or mobile apps designed for IFTA record keeping. These tools can automate many tasks and reduce errors.
• Regularly Review Your Records: Periodically review your records to ensure accuracy and completeness. This will help you identify and correct any errors before filing your IFTA return.
• Maintain Records for the Required Period: IFTA requires you to keep your records for four years from the date the return was filed or the date the return was due, whichever is later.

IFTA Audits: What to Expect

You may be selected for an IFTA audit to verify the accuracy of your fuel tax reporting. If you are audited, you'll need to provide your mileage and fuel records to the auditor. Staying organized and maintaining accurate records will make the audit process much smoother.

Consequences of Non-Compliance

Failure to comply with IFTA requirements can result in penalties, including:

• Fines: Penalties for late filing, underpayment of taxes, or failure to maintain proper records.
• Interest Charges: Interest on unpaid taxes.
• Revocation of IFTA License: Suspension or revocation of your IFTA license, preventing you from operating in participating jurisdictions.

Final Thoughts

While IFTA record keeping may seem daunting at first, it becomes easier with practice and the right tools. By understanding the requirements and implementing best practices, you can ensure compliance and avoid costly penalties. Remember to consult with your accountant or a qualified IFTA consultant if you have any questions or need assistance.