Frequently Asked Questions
Qualified Motor Vehicles
- The definition of qualified motor vehicle includes vehicles having three or more axles regardless of weight. Is the trailing unit of a combination vehicle included when determining the number of axles?
- No. The number of axles on the power unit is the determining factor, and the number of axles of a trailing unit has no bearing on the determination.
- Are mobile-home toters, wreckers and well drilling rigs qualified motor vehicles?
- When a vehicle meets the definition of “qualified motor vehicle” by weight when pulling a trailing unit, but does not when operated alone, it is considered a qualified motor vehicle, whether or not it is pulling a trailing unit. However, enforcement personnel cannot require the display of a decal or IFTA license when the vehicle does not meet the definition. For example, if a mobile-home toter is operating through a member jurisdiction, is not pulling a trailing unit, and otherwise does not meet the definition of qualified motor vehicle, there is the possibility that the vehicle has never been qualified for purposes of IFTA. Therefore, enforcement personnel cannot cite the driver for failure to display IFTA credentials. Owners of these vehicles may choose a fuel trip permit if they only occasionally travel interstate.
- Is a pickup truck that occasionally pulls a trailer and exceeds the 26,000 pounds (11,797 kilograms) threshold a qualified motor vehicle?
- Yes. If the vehicle, when traveling in combination, meets the IFTA weight requirement, it is considered a qualified motor vehicle. As such, proper IFTA credentials or a fuel trip permit will be required for interstate travel. If the pickup is licensed under IFTA, all operations (including those when the pickup is not used in combination) must be reported for the license year.
- In cases involving lessee/lessor agreements, which party is responsible for licensing under IFTA?
- If the lease is for a period of 30 days or more, the parties may stipulate which party (the lessor or the lessee) will report and pay the fuel tax. If the lease is for a period of less than 30 days, the lessor will report and pay the fuel tax unless the lease contract designates the lessee as the responsible party and the lessor has a copy of the lessee's valid IFTA license.
- Does a farmer need to be licensed under IFTA?
- A farmer whose operations and vehicles meet the IFTA requirements for licensing should either obtain an IFTA license or purchase fuel trip permits. However, some jurisdictions exempt from taxation the fuel used by motor vehicles in farming operations. If this is the case of the jurisdiction in which the farmer is based, but is not the case in another member jurisdiction in which the farmer travels, the farmer should license under IFTA. While the operations for the base jurisdiction are exempt from taxation, the farmer will use the IFTA tax return to report and pay taxes to other jurisdictions in which he travels.
- Can a carrier be licensed under IFTA in more than one member jurisdiction?
- Yes, a carrier that has fleets of qualified motor vehicles registered throughout member jurisdictions can be licensed for IFTA in each jurisdiction in which a fleet is registered. However, if all qualified motor vehicles are owned by the same company operating under the same federal Employer Identification Number (FEIN) and one jurisdiction revokes the carrier's IFTA license, then all IFTA licenses held by the carrier are revoked until cleared.
- For IFTA licensing, can a licensee consolidate fleets that would otherwise be based in two or more IFTA jurisdictions into one jurisdiction?
- Yes, but each affected jurisdiction must approve the consolidation.
- Does IFTA provide for a maximum number of miles traveled in another IFTA jurisdiction before IFTA licensing is required?
- No. A carrier based in an IFTA member jurisdiction that travels in the base jurisdiction and at least one other member jurisdiction is required to license under IFTA unless that carrier chooses to purchase fuel trip permits for all of the IFTA member jurisdictions in which he travels, including the carrier's base jurisdiction.
- Do member jurisdictions require an application to renew IFTA licenses?
- Some jurisdictions require the licensee to submit a renewal application. Texas-based carriers, however, who are eligible for license renewal will automatically be issued a current year license and decals. We may deny your license renewal if you failed to file any IFTA return, failed to remit IFTA tax amounts due any member jurisdiction, are delinquent for any taxes or fees administered by the Comptroller, have not reported interstate travel in the preceding six quarters, or if you are an entity that has had its registration with the Texas Secretary of State forfeited or cancelled.
- Are bonds generally required from first-time IFTA license applicants?
- When can a base jurisdiction require a bond?
- A bond may be required if a licensee fails to timely file returns or remit tax due or if, during an audit of an IFTA licensee, severe problems are indicated and member jurisdictions' interests must be protected.
- How many IFTA decals are required to be displayed on each qualified motor vehicle operating through member jurisdictions?
- Two, one on each exterior side of the cab.
- Can decals be faxed?
- No. However, the base jurisdiction has the discretion to issue 30-day temporary decal permits that take the place of a decal. Temporary decal permits may be faxed to a licensee and carried in the qualified motor vehicle until decals are received.
- Does an IFTA licensee need to obtain decals from each member jurisdiction?
- No. The credentials issued by a licensee's base jurisdiction allow that licensee to travel through all member jurisdictions without further licensing requirements.
- If, for purposes of the International Registration Plan (IRP), a carrier has a fleet of qualified motor vehicles registered in Texas and also has a fleet registered in Arkansas, for example, and approval has been granted for the consolidation of such fleets with Arkansas as the base jurisdiction, what credentials are required to satisfy the IFTA requirements?
- Arkansas IFTA licenses and decals should be displayed on all qualified motor vehicles operated by the carrier through IFTA jurisdictions, regardless of the fact that the qualified motor vehicle may be displaying a Texas plate.
- If, for purposes of IRP, a carrier has a fleet of qualified motor vehicles registered in Texas and also has a fleet registered in Arkansas, for example, and the carrier chooses not to consolidate fleets in either jurisdiction for purposes of IFTA licensing, what credentials are required to satisfy the IFTA requirements?
- If each fleet qualifies, the carrier should license for IFTA in both Texas and Arkansas. IFTA credentials from Texas would be displayed on the Texas-registered qualified motor vehicles and IFTA credentials from Arkansas would be displayed on the Arkansas registered qualified motor vehicles.
Quarterly Tax Returns
- What information is included on an IFTA tax return when a licensee travels on a fuel trip permit?
- Miles traveled while using a fuel trip permit should be included in total IFTA miles (Item A) and as part of the total IFTA miles (Item H) traveled in the applicable jurisdiction, but not as taxable miles (Item I) traveled for that jurisdiction. Fuel purchases, while operating under a fuel trip permit should be included in total gallons consumed (Item D) to calculate the miles per gallon and in the tax paid gallons (Item L) purchase (if taxes were paid at the time the fuel was purchased) for the appropriate jurisdictions.
- Can the operations of vehicles that weigh less than 26,000 pounds (11,797 kilograms) and otherwise do not meet the definition of "qualified motor vehicle" be included on the IFTA tax returns?
- No. Only the operations of “qualified motor vehicles” are to be reported on IFTA tax returns.
- Can the operations (miles traveled and gallons consumed) of qualified motor vehicle(s) that only travel within one jurisdiction be reported on the IFTA tax return?
- Yes. A licensee may include the travel and gallons consumed of qualified motor vehicles that operate exclusively within a jurisdiction by obtaining IFTA decals for the intrajurisdictional vehicle(s). Once decaled, the intrajurisdictional vehicle(s) must continue to be reported until either the expiration date of the decal or the vehicle(s) are no longer under the control of the licensee.
- Which tax rate chart should a licensee use when amending an IFTA tax return?
- Jurisdiction tax rates may change from quarter to quarter, so a licensee must use the tax rate chart for the specific quarter being amended. The correct tax rate chart may be obtained by contacting the Comptroller's office or online at www.iftach.org.
- Can a base jurisdiction waive interest due by a licensee to other member jurisdictions?
- Interest due to member jurisdictions cannot be waived by a base jurisdiction without written approval from the other member jurisdictions.
- Is interest calculated for jurisdictions with a credit when filing an IFTA tax return after the due date?
- No. Interest is not earned from a jurisdiction on delinquent tax returns.
- Can a licensee report more tax paid gallons purchased than total gallons consumed?
- The total tax paid (Item L) gallons purchased should never exceed the total gallons consumed (Item D). A licensee with bulk storage should include in tax-paid gallons the number of gallons actually removed from their bulk storage and delivered into their IFTA qualified vehicles.
- What information should be reported for total non-IFTA miles?
- Non-IFTA miles (Item B) include only the miles traveled in the non-IFTA jurisdictions of the Northwest Territories and Yukon Territory of Canada, Mexico, Alaska and the District of Columbia. Miles traveled in Oregon and the miles traveled while utilizing a fuel trip permit should be included in the total IFTA miles (Item A) and in the total IFTA miles (Item H) for the appropriate jurisdictions.
- What are "gap miles" and should gap miles be included on the quarterly IFTA fuel tax report?
- Gap miles are the difference in the miles recorded for a trip on your trip sheet and the actual miles traveled based on the beginning and ending odometer or hubmeter readings for that trip. Gap miles are usually an audit issue. Generally, audited gap miles are allocated to the jurisdiction(s) where the travel most likely occurred. You should make every effort to make sure miles traveled are accurately reported on your quarterly IFTA tax report.
- Can a licensee use a fleet fuel card to document fuel purchases?
- Yes. Fleet fuel card receipts are acceptable as long as the receipt documents the delivery of fuel into a specific vehicle. This requirement can be satisfied by either assigning a fuel card to a specific vehicle and only using that card to refund that particular vehicle or by writing on the hard copy of the fuel receipt the identity (i.e., unit number or license plate number) of the vehicle into which the fuel is delivered when the a fuel card is used for multiple vehicles. It is an audit issue if the fuel card receipts do not identify the vehicle into which the fuel is delivered. A monthly summary of miles traveled and fuel consumed by each licensed vehicle is also required.
- How do I calculate penalties and interest for past due International Fuels Tax Agreement (IFTA) taxes?
- The minimum penalty is $50 or 10 percent of your total tax liability, whichever is greater. The minimum penalty applies to all late reports including no operations, no tax due and credit reports.
Interest is assessed on all delinquent taxes for each month or fraction of a month beginning on the first day after the due date. The interest rate is adjusted each year on January 1. The current interest rate is available on our IFTA Web page.
Jurisdiction Interest begins to accrue one day after the report is due through the report postmark date. Once the report is filed, additional interest accrues on any net tax due until the total net tax due is paid in full.
Records Kept by Licensees
- How long must a licensee maintain records to support information reported on an IFTA quarterly tax return?
- An IFTA licensee must preserve records to substantiate reported information for four years from the due date of the return or the date the return is filed, whichever is later.
- To meet the requirements of an acceptable receipt for the purchase and payment of tax on fuel, IFTA requires that the “purchaser's” name be included on the receipt. Is the “purchaser” the driver of the vehicle or the company?
- The “purchaser” is the company for whom the fuel purchase is being made.
Credits and Refunds
- If an IFTA licensee files a delinquent tax return for the current quarter and has a prior period credit with the base jurisdiction, is the prior credit applied before calculating the interest on tax due on the delinquent tax return?
- How long does a licensee have to request a refund of a credit or to use a credit to offset a tax liability?
- A licensee has eight calendar quarters after the calendar quarter in which the credit is earned to either request a refund or use the credit to offset an IFTA tax liability. For example, if a credit accrues in the 3rd quarter, 2010, the licensee has until Oct. 1, 2012, to request a refund or to apply the credit toward a liability.
- Is the preprinted "credits available" (Item 9a) amount on the IFTA tax return always correct?
- The date that the “credits available” amount was calculated is printed on the IFTA tax return. The Comptroller may process IFTA tax returns after that date. Therefore, the licensee must check their records to verify the credit amount available before applying the credit toward a tax liability.
- Can a licensee claim a tax refund or credit for motor fuel consumed by power take-off units, auxiliary power engines or other off-highway equipment on the quarterly IFTA tax report?
- No. The IFTA tax report cannot be used to claim a refund for tax-exempted uses of motor fuel other than for tax-exempt miles as discussed on page 5 of this guidebook. Your IFTA return must report all fuel delivered into IFTA licensed vehicles and all miles traveled. A separate refund request for exempted uses must be made directly to each jurisdiction in which the motor fuel was consumed.
- Are tax-exempt miles and tax-exempt fuel consumption the same in all IFTA member jurisdictions?
- No. Jurisdictional laws vary greatly, and carriers must check with each jurisdiction.
Biodiesel Fuel and Renewable Diesel Fuel
- How does a licensee report biodiesel fuel/renewable diesel fuel and biodiesel fuel/renewable diesel fuel blends purchased and used in Texas?
- Biodiesel fuel/renewable diesel fuel and biodiesel fuel/renewable diesel fuel blends, such as B-20, are included in the total gallons consumed (Item D) to calculate your fleet's average miles per gallons. It is presumed that biodiesel fuel/renewable diesel fuel and biodiesel/renewable diesel fuel blends are consumed in the jurisdiction where the fuel was purchased. Biodiesel fuel that is purchased in Texas and delivered into the fuel supply tank(s) of IFTA licensed motor vehicles is considered consumed in Texas. Therefore, you should also include biodiesel fuel/renewable diesel fuel and biodiesel fuel/renewable diesel fuel blends purchased in Texas in the tax paid gallons (Item L) for Texas. See Rule 3.443, Texas Administrative Code.
- Can a licensee request a refund for tax paid to a jurisdiction other than Texas on biodiesel fuel or biodiesel fuel blends that are actually consumed in Texas?
- Yes. The presumption that biodiesel fuel and biodiesel fuel blends are consumed in the jurisdiction where the biodiesel fuel was purchased may be overcome if it is shown that the total gallons of biodiesel fuel or biodiesel fuel blends purchased in the IFTA jurisdiction is greater than the amount of total gallons of diesel fuel used in that jurisdictions by all diesel-powered motor vehicles operated by the licensee during the reporting quarter. An IFTA licensee who overpays the tax on biodiesel fuel or biodiesel fuel blends by way of their IFTA tax return may request a refund from the Comptroller. You may download a copy of the Texas Claim for Refund of Gasoline and Diesel Fuel Taxes (Form 06-106) (PDF, 230KB) online. A refund claim must be supported with purchase invoice(s) and the IFTA tax return on which the tax was paid to Texas.
Petroleum Products Delivery Fee
House Bill 2694, passed during the 82nd Legislature Regular Session (2011), reauthorized and made permanent, the fee on the delivery of certain petroleum products that was set to expire on August 31, 2011. The law requires the Texas Commission on Environmental Quality (TCEQ) by rule to set the amount of the petroleum product delivery fee rates. The fee applies to all petroleum products imported into Texas or withdrawn from a Texas bulk storage facility and delivered into cargo tanks or barges. The fee set by the TCEQ as shown below are effective July 1, 2012.
- What is the Petroleum Products Delivery (PPD) Fee?
- Texas assesses a delivery fee on petroleum products when they are withdrawn from a bulk facility and delivered into a cargo tank or barge, or imported into the state in a cargo tank or barge for delivery to another location for distribution or sale.
Defined as fuels for motor vehicles or aircraft, “petroleum products” include gasoline, gasohol, other alcohol-blended fuels, aviation gasoline, kerosene, distillate fuel oil, and #1 and #2 diesel fuel. The fee is not assessed on naphtha-type jet fuel, kerosene-type jet fuel, or petroleum products destined for use in, or feedstock for, chemical manufacturing.
- How is the PPD fee calculated?
- The fee is based on the total net temperature-corrected quantity delivered:
Less than 2,500 gallons $2.75 At least 2,500 but less than 5,000 gallons $5.50 At least 5,000 but less than 8,000 gallons $8.65 At least 8,000 but less than 10,000 gallons $11.00 10,000 gallons or more, per 5,000 gallons or increment thereof $5.50
Gasoline-only withdrawals of at least 7,000 but less than 10,000 gallons are presumed to be into a cargo tank with a capacity of at least 8,000 but less than 10,000 gallons. The delivery fee for a withdrawal of 7,400 gallons of gasoline only is therefore $11.00.
On split loads, the PPD fee is based on the total of gasoline and diesel fuel and not a separate fee on each product. If there is less than 7000 gallons of gasoline in the split load, the fee is based on the total net temperature gallons of all products withdrawn. If there are 7,000 gallons or more of gasoline in a split load, the fee is based on the presumption that the withdrawal is into a cargo tank with a capacity of at least 8,000 gallons but less than 10,000 gallons.
Examples: Gasoline Gallons: 5,000 7,000 8,100 7,050 7,500 Diesel Fuel Gallons: 2,500 700 300 0 3,000 Total Gallons 7,500 7,700 8,400 7,050 10,500 Delivery Fee Due $8.65 $11.00 $11.00 $11.00 $16.50
Rule 3.151(d) addresses the amount of delivery fee due when the gasoline withdrawn is 7,000 gallons or more.
- Who collects the fee?
- Bulk facility operators and petroleum products importers collect the PPD fee, then report and pay their collections to the state. All bulk facility operators and importers must have a Petroleum Products Delivery Fee Permit.
A “bulk facility” includes pipeline terminals, rail and barge terminals, and associated underground and aboveground tanks, connected or separate, from which petroleum products are withdrawn and delivered into a cargo tank or barge for transport.
- Who is exempted from the PPD fee?
- The fee is not assessed when fuel is exported to another state or delivered to another bulk facility, an electrical generating plant, or a common carrier railroad for its exclusive use. Withdrawals from a bulk facility into a cargo tank or barge are also exempted from the fee when the entire withdrawal, prior to any delivery into intermediate storage, is delivered into the fuel supply tanks of vessels or boats.
Persons exempt from the fee must request in writing a letter of exemption from the Comptroller. The Comptroller's letter of exemption or a copy must be given to the seller each time exempt purchases are made.
- What is the fee used for?
- Revenue from the fee is used to fund the Petroleum Storage Tank Remediation account, a groundwater protection program administered by the Texas Commission on Environmental Quality.