IFTA is an agreement among all states (except Alaska and Hawaii) and Canadian provinces (except Northwestern Territories, Nunavut and Yukon) to simplify the reporting of fuel used by motor carriers operating in more than one jurisdiction.
The IFTA license offers several benefits to the interstate/inter-jurisdictional motor carrier. These benefits include one license, one set of decals per vehicle, and one quarterly fuel tax report per licensee that reflects the net tax or refund due. These advantages result in cost and time savings for the carrier and the member jurisdictions.
Who should file for IFTA Licensing?
Persons who operate “qualified motor vehicles” are subject to IFTA licensing, reporting and recordkeeping requirements unless the vehicle is exempt or a trip permit is obtained as described below.
Qualified motor vehicle – a motor vehicle used, designed, or maintained for transportation of persons or property and:
Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or
Having three or more axles regardless of weight; or
Is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight. Qualified motor vehicle does not include recreational vehicles.
Who needs a permit?
Any person or business entity that is paid to transport property in their motor vehicle regardless of vehicle size or weight. Persons who transport property for compensation are deemed a ‘For-Hire’ motor carrier.
Generally, any person or business entity operating a commercial vehicle with a Gross Vehicle Weight Rating (GVWR) of 10,001 pounds or more, either for business or personal use.
Persons operating such vehicles are deemed a ‘Private’ motor carrier.
What’s included in the Packet?
– International Registration Plan (IRP) – vehicle registration
– International Fuel Tax Agreement (IFTA) – heavy vehicle motor fuel taxes
– Employer Identification number (EIN/FEIN)
– Registration information for the Department of Financial Institutions (DFI) if you will operate under a corporation or LLC
– USDOT Number
– Authority – to operate for-hire
– Heavy Vehicle Use Tax
– Unified Carrier Registration (UCR)
– Instructions for online access to your IRP & IFTA accounts
– Electronic Credential Program
The Federal Employer Identification Number (EIN) is a number by which the IRS identifies taxpayers. An individual may use his Social Security Number on many tax forms. However, anyone who employs others, or is self-employed, is required to have an EIN.
Generally you need an EIN when your business:
– Is new
– Is an LLC or Corporation
– Corporations organized under Wisconsin law
– Limited liability companies (LLCs) treated as corporations for federal income tax purposes
– Foreign corporations licensed to do business in Wisconsin
– Unlicensed corporations doing business in Wisconsin
– Foreign corporations having an interest in a partnership that does business in Wisconsin
– Publicly traded partnerships treated as corporations in section 7704 of the Internal
– Revenue Code (IRC)
– Corporations that derive income from the sale of or purchase and subsequent sale or
redemption of lottery prizes if the winning tickets were originally bought in Wisconsin
Every corporation organized under the laws of Wisconsin or licensed to do business in Wisconsin (except certain organizations exempt under sec. 71.26(1), Wis. Stats.) is required to file a Wisconsin corporate franchise or income tax return, regardless of whether or not business was transacted. Unlicensed corporations are also required to file returns for each year they do business or have certain business activities in Wisconsin.
What is “heavy vehicle use tax”?
Heavy Vehicle Use Tax (HVUT) is an annual tax assessed by the Federal Internal Revenue Service (IRS) on vehicles operating on public highways at a gross weight of 55,000 lbs. and greater. Although the tax has been in effect since 1954, the federal government held the states responsible for enforcement beginning in October 1985. The federal government distributes revenues back to states for highway construction and maintenance.
What is proof of compliance?
A carrier must send proof of HVUT compliance to the DMV with their registration renewal. For vehicles registered annually (IRP and Intrastate), proof is sent in with the annual renewal. For Intrastate vehicles registered quarterly or consecutive monthly, proof is sent in with the first registration during a calendar year. Proof of HVUT compliance cannot be sent separately from the IRP or Intrastate registration renewal. Proof of compliance may be either:
– A copy of a receipted Schedule 1 from IRS form 2290, or
– A copy of a completed 2290, Schedule 1 and both sides of the
Are there any exemptions from HVUT?
Yes. Some exemptions are:
– Vehicles which travel fewer than 5,000 miles annually or agricultural vehicles which travel fewer than 7,500 miles annually. Carriers must file Schedule 1 with the IRS and send a
receipted copy to the DMV
– Mobile cranes and well-drilling vehicles when the carrier files a signed statement with the DMV which lists the vehicle identification number, vehicle type and tax year
– vehicles registered at 56,000 lbs. but actually operating between 54,001 and 54,999 lbs. when a signed statement is filed with the DMV
However, even if exempted, the carrier may be required to file with the IRS or notify the DMV of exempt status.
When are tax forms filed?
A carrier must file tax forms with the IRS by the end of the month following the month the vehicles first operated on public highways.
Motor carrier operating authority is permission to carry property for someone else for compensation, or to carry passengers for compensation. This is also referred to as being a “for-hire” carrier.
Interstate motor carrier operation authority (crossing state lines):
Interstate motor carrier operating authority for carriers hauling regulated commodities or passengers is issued at the Federal level by the Federal Motor Carrier Safety Administration.
Intrastate operating authority – property (operation within Wisconsin only):
Request intrastate motor carrier operating authority for property from our office. When authority to operate is granted, the motor carrier will receive a certificate. This certificate will indicate the intrastate authority number designated by the letters “LC” and followed by the authority number.
Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the FMCSA and must have a USDOT Number. Also, commercial intrastate hazardous materials carriers who haul types and quantities requiring a safety permit must register for a USDOT Number.
The USDOT Number serves as a unique identifier when collecting and monitoring a company’s safety information acquired during audits, compliance reviews, crash investigations, and inspections.
You are required to obtain a USDOT number if you have a vehicle that:
– Is used to transport the types and quantities of hazardous materials requiring a safety permit in intrastate commerce (see 49 CFR 385.403).
– Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater; or
– Is designed or used to transport more than 8 passengers (including the driver) for compensation; or
– Is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation;
AND is involved in Interstate commerce:
Trade, traffic, or transportation in the United States—
– Between a place in a State and a place outside of such State (including a place outside of the United States);
– Between two places in a State through another State or a place outside of the United States; or
– Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.
What is the Unified Carrier Registration (UCR)?
The UCR collects fee to be used to be for motor carrier safety and enforcement program. The UCR applies to more business operations. Fees are lower and vary by the number of vehicles operated interstate by the covered businesses.
What businesses must file UCR?
Private motor carriers, for-hire motor carriers, leasing companies, freight forwarders and brokers in the motor carrier industry must file UCR if they operate in interstate business. Canadian carriers operating in the USA must file UCR. Other businesses operating in interstate commerce that may not be required to comply with the International Registration Plan (IRP) or International Fuel Tax Agreement (IFTA) requirements are required to file UCR. Some bus operation across state lines, for school or religious purpose, may be exempt from UCR.
Kentucky’s Highway Use Tax (KYU) is a weight-distance tax, based on mileage traveled by motor vehicles through Kentucky. You need a KYU license if your vehicle travels through Kentucky and has a gross weight of 60,000 pounds or more. Once a KYU license is issued, quarterly reports must be filed.
A KYU number is proof that you have registered with Kentucky to pay a per mile tax. Highway use tax forms will be sent to you on a quarterly basis and must be completed and returned by the required due date. KYU numbers no longer need to be posted on the sides of your power unit since your USDOT# will be used as means of identifying the carrier and the status of the carriers KYU account.
New Mexico’s Weight Distance Tax is a weight-distance tax, based on mileage traveled on New Mexico highways. You need a NM Weight Distance Tax ID Permit if your vehicle travels through New Mexico and has a gross weight of more than 26,000 pounds. Once a NM Weight Distance Tax ID Permit is issued, quarterly reports must be filed.
New York’s Highway Use Tax (HUT) is a weight-distance tax, based on mileage traveled by motor vehicles on New York State public highways and vehicle weight. You need a HUT permit if your vehicle travels through New York and has a gross weight of more than 18,000 pounds. Once a HUT permit is issued, quarterly reports must be filed.
About 21,500 motor carriers pay the Oregon weight-mile tax, including 8,500 Oregon-based carriers and 13,000 out of- state carriers with trucks operating in Oregon. When they register a truck they pay a registration fee that is based on the truck’s highest combined weight for the year (weight of the truck plus maximum weight of the load it will haul). Their weight-mile tax is then based on the declared combined weight(s) established for each truck combination – the heaviest weight at which the motor carrier declares the combination will operate during a month or quarter tax reporting period. A check of 283,145 trucks registered in July 2010 showed eight of every ten (225,742 total) operate at just one declared combined weight (80,000 pounds for most). Only 20% of all trucks operate under more than one declared weight. Oregon first enacted a ton-mile tax on trucks in 1925 and replaced that with a weight mile tax in 1947. In 1990, it implemented the first axle-based weight-mile tax for trucks over 80,000 pounds (Table B). Over the years, weight-mile rates have been adjusted 14 times based on the results of updated cost responsibility calculations in Oregon Highway Cost Allocation Studies.
Today, Oregon is the only state that charges heavy trucks (over 26,000 pounds) a weightmile tax and no diesel fuel tax. Three other states — Kentucky, New Mexico, New York — have a weight-mile tax that they charge certain heavy trucks, but also in conjunction with a diesel fuel tax and other truck fees.
Temporary fuel and trip permits are available to authorize transportation through a state(s) in which a carrier does not have proper fuel or registration credentials.
Temporary fuel permits are required if a carrier does not have the IFTA credentials or a fuel permit for the state(s) which will be traveled through.
Trip permits are required when traveling to a state(s) which a carrier is not apportioned (IRP) or registered.
Standards to Qualify:
* 2 axles and a gross/registered weight exceeds 26,000 pounds
* Power unit has 3 or more axles
Federal Rules mandate that every Interstate Authorized For Hire Carrier operating under their own operating authority have a current BOC -3 form on file with the office of motor carrier safety. The BOC-3 form is a list of registered process agents for each state, who, in the event of a legal action being presented against the motor carrier by an individual or legal entity from outside the carriers base state, would accept the papers being served on the carriers behalf and would then forward them to the carrier being served. A current BOC-3 form must be on file with FOMCSA in order to secure operating authority and to maintain active operating status. A current BOC -3 form is also required to be on file on a state level for securing single state registration (RS-3 receipt), exempt carrier registration and private carrier registration.
Our Trading helps clients run and transform their front, middle and back-office trading operations. We provide buy-side, sell-side and market infrastructure firms with a full-service offering, including systems integration and technology consulting services, to assist in delivering high performance trading and settlement capabilities across all asset classes. This includes strategy, architecture design, operating model work, process improvement, systems building and trading p