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What is the International Fuel Tax Agreement?

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Quick Answer

The International Fuel Tax Agreement is an agreement among some Canadian provinces and all states in the United States, except Hawaii and Alaska that consolidates the reporting of motor fuel usage by carriers operating in more than one jurisdiction. People operating qualified motor vehicles must secure IFTA licensing and adhere to the record-keeping and reporting requirements set by the agreement, states the Wisconsin Department of Transportation.

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Full Answer

The International Fuel Tax Agreement is not a separate fee or tax but an agreement that consolidates tax reporting for qualifying motor vehicles, states the Texas Comptroller of Public Accounts. Under the agreement, qualified motor vehicles are vehicles with three or more axles used to transport people or property. Vehicles with two axles and gross weights exceeding 26,000 pounds are also subject to the agreement. Recreational vehicles used exclusively for pleasure are not subject to IFTA licensing, claims the Wisconsin Department of Transportation.

Each state issues its International Fuel Tax Agreement licenses that motor carriers use to travel to other IFTA member jurisdictions. Vehicles registered and operating in Wisconsin, for example, get IFTA licenses and report fuel usage to the state. The IFTA license saves time and costs for motor carriers and member jurisdictions, according to the Wisconsin Department of Transportation.

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