What Is IFTA and How Does It Work for Canadian Carriers?
What Is IFTA and How Does It Work for Canadian Carriers?
If your qualified commercial truck operates in Ontario and at least one other IFTA province or U.S. state, you will generally need an IFTA licence.
The International Fuel Tax Agreement allows carriers to file one fuel tax return through their base jurisdiction instead of filing separately everywhere they operate.
Which vehicles qualify?
A vehicle generally qualifies if it:
Has two axles and weighs more than 26,000 pounds (11,797 kilograms)
Has three or more axles, regardless of weight
Operates in a combination exceeding 26,000 pounds
Most highway tractors qualify.
What registration and filing looks like
Once registered, carriers display two IFTA decals, one on each side of every qualified vehicle, and file a return every quarter. Returns are generally due on the last day of the month following each quarter.
Each return reports:
Distance travelled in each jurisdiction
Fuel purchased in each jurisdiction
Total fuel consumed
Your base jurisdiction then calculates whether additional tax is owed or a refund is due.
Non-member jurisdictions
Yukon, Northwest Territories, Nunavut and Mexico are not IFTA members. Carriers operating there must follow the applicable local fuel tax and permit requirements.
The recordkeeping mistake most new carriers make
The biggest mistake new carriers make is waiting until filing time to organize everything. Keep fuel receipts, mileage records and trip details from day one.
Ontario requires records supporting an IFTA return to be retained for four years from the return's due date or filing date, whichever is later. This is longer than the six-month FMCSA retention period for ELD records and supporting documents, so carriers should maintain a separate system for IFTA records.
IFTA itself is not complicated. Poor recordkeeping is what creates problems. Set up a proper system before your truck starts running. It is much cheaper than fixing a compliance mess later.