IFTA Meaning and
Definition
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The International Fuel Tax Agreement (IFTA) is a cooperative agreement among the lower 48 states of the United States and the Canadian provinces that simplifies the reporting and payment of fuel taxes by interstate motor carriers. IFTA acts as a uniform system for collecting and distributing fuel taxes among participating jurisdictions.
Under IFTA, carriers operate under a single fuel tax license for all eligible jurisdictions. This license replaces the need for obtaining separate permits for each state or province in which they operate. IFTA requires carriers to maintain detailed records of fuel purchases and usage associated with their fleet, including the number of miles traveled in each jurisdiction and the fuel consumed. Carriers must file a quarterly fuel tax return and submit the appropriate tax payment to their base jurisdiction.
The IFTA system calculates the amount of fuel taxes owed to each jurisdiction based on the jurisdiction's current rate and the carrier's total distance traveled. The tax collected by each jurisdiction is then distributed proportionally by the carrier's base jurisdiction to the appropriate states or provinces.
By implementing IFTA, the burden of meeting various state and provincial fuel tax requirements is significantly reduced, providing a more streamlined and efficient process for motor carriers. This cooperative agreement helps maintain a fair and equal distribution of fuel taxes, while also promoting compliance and reducing administrative costs for both carriers and government entities.
Common Misspellings for IFTA
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