International Fuel Tax Agreement
If you are considering getting into the Hotshot Carrier business, it is important that you totally understand IFTA which is an agreement among all states (except Alaska and Hawaii) and Canadian provinces (except Northwestern Territories, Nunavut and Yukon) to simplify the reporting of fuel used by motor carriers operating in more than one jurisdiction. Persons who operate qualified motor vehicles are subject to IFTA licensing.
- Who qualifies for an IFTA license and what is a "Qualified Motor Vehicle" under IFTA?
You qualify for an IFTA license if you operate your qualified motor vehicle in any U.S. state or Canadian province that is a member of the International Fuel Tax Agreement. To qualify, your vehicle must meet the following weight requirements:
A vehicle used or designed to transport property
is a qualified motor vehicle if it:
- Has three or more axles; or
- Has two axles and a gross vehicle or registered gross vehicle weight
of more than 26,000 pounds; or
- Is used in a combination that has a combined or registered gross vehicle weight of more than 26,000 pounds. If you are a HotShot operator, it is extremely important to understand this qualification. The critical word here is registered. If your GVWR is over 26,000 pounds, many hotshot operators elect to register at just the 26,000 pounds so they don't have to worry about paying fuel taxes which is generally OK as long as they don't cross a scale one pound over this magic number. There are several things to keep in mind. First, fuel taxes are more of a paperwork problem than a cost problem. All you have to do is purchase an amount of fuel in each state to offset the fuel consumed in that state to offset any potential fuel tax liability. Second, if your equipment can haul 30,000 pounds and you are registered at 26,000 pounds you are limiting your ability to haul this extra weight which can effect your earnings.
- Carriers traveling in non-IFTA jurisdictions must continue to comply with the fuel tax reporting requirements of those jurisdictions.
- Why should I register for IFTA?
The IFTA license offers several benefits to the interstate/inter-jurisdictional motor carrier. These benefits include one license, one set of decals, one quarterly fuel tax report that reflects the net tax or refund due. In addition, your fuel tax records will generally be audited only by your base jurisdiction. These advantages result in cost and time savings for the carrier and the member jurisdictions.
- Where can I travel using IFTA Credentials?
Most Canadian provinces and US states are IFTA members.
The jurisdictions listed below are not IFTA members and IFTA credentials are not valid for travel there:
- United States: Alaska, Hawaii and the District of Columbia
- Canada: Northwest Territories, Nunuvit and Yukon Territory
- Mexico: All states and the Federal District
If you plan to travel in these jurisdictions please contact them for information regarding their fuel tax reporting requirements.
- Which taxes does IFTA cover?
IFTA covers fuel taxes only. It does not cover road taxes, weight mileage taxes, or any other jurisdiction specific taxes. You must continue to pay these taxes directly to the jurisdictions in which you travel.
- What are the fuel tax rates for IFTA jurisdictions?
You may view, print, or download the fuel tax rates for all IFTA jurisdictions at .
- Are there penalties for traveling without valid IFTA credentials or a fuel trip permit?
Yes. If you travel in an IFTA jurisdiction without valid IFTA credentials or a fuel trip permit, you may be subject to a penalty, fine or citation, depending on the jurisdiction's laws.
- When are IFTA reports due?
Under IFTA, you are required to file quarterly fuel tax reports. The reporting quarters and due dates are:
|January - March
|April - June
|July - September
|October - December
- Are there any exemptions for off-road use or other unusual uses?
IFTA, Inc. posts lists of exemptions accepted in each jurisdiction that you might travel. You may find the list of exemptions at: . Every attempt is made to keep this information current but we would recommend that you contact each jurisdiction before taking an exemption.
- What records will I need?
You must maintain records that will adequately document all of the information you provide on your quarterly fuel tax reports.
Generally, you must maintain records to document all miles you travel - including the date of your trip, route of travel, total trip miles, and miles traveled in each jurisdiction. You must also keep all receipts for fuel you buy and place into your vehicles. If you maintain a bulk fuel storage facility, you must maintain additional records.