Imagine the chaos that would reign on the roads if there were no traffic rules for drivers. Rather frightening, isn't it? However, for companies engaged in transportation or operating their vehicle fleet, in addition to the above rules, there are others aimed at settling disputes, relations between the carrier and the passenger, and unifying reports.
Mandatory regulatory requirements for freight and transport companies operating outside the same US state include:
- labor laws for drivers (licensing, daily routine);
- substantive regulations;
- International Fuel Tax Agreement (IFTA).
And the main questions, as a rule, arise in relation to the last document, especially when it comes to the IFTA fuel tax report.
Briefly About IFTA
IFTA is a cooperation agreement covering 48 US states and 10 Canadian provinces. The main goal of the deal is to unify and simplify the procedure of reporting and paying taxes for fuel consumed by carriers in different jurisdictions. In other words, having issued a single license, a driver or a manager of a transport company fills in one document to report on fuel consumed in any of the states that participate in the contract.
Benefits of Joining IFTA
IFTA is interesting for many companies that operate vehicles, as well as those that provide truck dispatching services. The license allows drivers to purchase fuel anywhere in the United States and Canada (except for certain regions) and provide an IFTA fuel tax report at the end of the financial quarter.
This document contains information about the mileage and the amount of purchased fuel by jurisdictions, on the basis of which your tax liabilities at the end of the reporting period are calculated using a special formula. As a result, the taxpayers will immediately see if they have a debt or an overpayment and will build further relationships with the main jurisdiction that issued the license. Thus, it will be possible to pay off expenditures on time or promptly return the money paid as tax.