Understanding IFTA License Registration
As a trucking company, staying compliant with the law is essential to your business's success. One of these laws includes the International Fuel Tax Agreement, more commonly known as IFTA. Those who operate commercial vehicles that travel across two or more jurisdictions must comply with IFTA regulations. This blog will cover everything you need to know about IFTA license registration.
IFTA License Overview
Firstly, it's important to understand that an IFTA license allows carriers to report and pay their owed taxes for fuel usage. It applies to commercial vehicles that weigh a certain amount of pounds or have three or more axles. The license allows carriers to travel across all jurisdictions within the United States and Canada. By obtaining an IFTA license, you will be able to file one report and make one payment instead of filing and paying separately for each state or province you operate in.
Eligibility Criteria
To qualify for an IFTA license, you must have operational control over a qualified motor vehicle and maintain an established place of business. You must have a registered business entity in at least one participating IFTA jurisdiction to apply for the IFTA license.
Application Process
To apply for an IFTA license, you must submit an application with the required supporting documents, such as your proof of insurance, Business Identification Number (BIN), and International Registration Plan (IRP) account information. The application can be submitted online or in-person to your jurisdiction's IFTA office. You may also be required to attend an IFTA education session where you will learn about proper record-keeping and tax calculation.
Record-Keeping
Once your IFTA license has been approved, carriers must maintain accurate and complete records for fuel purchases and mileage. Carrier's distance and fuel reports must be kept on file for up to four years in case of an audit. Besides, carriers must ensure they are correctly calculating the amount of fuel tax owed for each jurisdiction that they operate within.
In summary, IFTA licenses are crucial for trucking companies that operate across multiple jurisdictions within the United States and Canada. It simplifies the process of tax reporting and payments for fuel usage. Before applying for an IFTA license, it's vital to ensure you meet the eligibility criteria and have all the necessary documentation to support your application. By understanding the application process and record-keeping requirements, you'll ensure your compliance with IFTA regulations.
Contact a local company to learn more, like Simtax Consultants Inc.