The International Fuel Tax Agreement (IFTA) is an agreement between Canada and the lower 48 states of the United States of America in an effort to simplify the reporting of fuel consumption by vehicles that operate in more than one jurisdiction. The IFTA report is used to calculate the net tax or tax refund due to an IFTA license holder.
Member States of the IFTA
- British Columbia
- New Brunswick
- Nova Scotia
- Prince Edward Island
Except for Alaska, Hawaii, and the District of Colombia, all states in the US are member of the IFTA.
How Does IFTA Work?
To understand how the IFTA works, it’s important to understand why it exists. Before the IFTA was put in place each of the 48 states in the US had their own fuel tax rates and truckers hauling cargo between these states needed to get fuel permits from each state in order to file the taxes they paid on fuel. The process of obtaining a fuel permit in each state the truck traveled through was time-consuming, slowing down the entire supply chain.
The IFTA was put in place to allow drivers to make a single report of their inter-jurisdictional fuel consumption to their base state using the IFTA license. The IFTA license works as a universal fuel permit. The IFTA puts the base state in charge of processing fuel tax returns and collecting taxes on net fuel use to distribute the appropriate taxes to their respective states. The base state is also responsible for periodically conducting IFTA audits to ensure companies are complying.
Do You Need an IFTA License?
You need an IFTA license if you fulfill any one of the following conditions:
- Your base state is a member state of the IFTA.
- Your operations are across two or more member states.
- Your operations involve the transportation of freight or people.
- You operate a ‘Qualified Motor Vehicle’.
What is a ‘Qualified Motor Vehicle’ according to the IFTA?
The IFTA defines a qualified motor vehicle as:
- Any vehicle that has two axels with a gross weight or a registered gross weight of 26,000 pounds (11,797 kilograms) or more.
- Any vehicle with three or more axels.
- A combination of two or more vehicles resulting in a gross weight of 26,000 pounds (11,797 kilograms) or more.
How Can a GPS Fleet Tracking System Help with IFTA Reporting?
When running a large fleet of vehicles, tax reporting can be quite a time-consuming task as the amount of data you need to collect and process is quite large. Manually recording this data and processing it can also lead to a clerical error that can result in tax penalties. This is where GPS Fleet Tracking systems come into play.
Modern GPS Fleet Tracking systems come with a myriad of features that can help you gather accurate data regarding your vehicles and fleet for your IFTA reports in seconds. These features include:
GPS Fleet Tracking systems provide the user with a real-time feed of the locations of their vehicles. Some GPS systems also provide other data like, the speed of the vehicle, and the status of the vehicle, whether it is driving or parked.
GPS Fleet Tracking systems also provide the user with alerts and notifications on events taking place within the fleet. These systems will alert you if a vehicle suffers a breakdown or if it meets with an accident. It will also send out alerts for other abnormal activity.
Geo-Fencing is the process of adding digital fences on the GPS between certain points or at certain landmarks. This allows the system to alert you every time a vehicle enters or exits a geo-fenced area. Geo-fencing is great for recording fuel data from different jurisdictions for IFTA reports.
There are some GPS tracking systems that come with fuel sensors attached. These fuel sensors are used to gather fuel data such as mileage, fuel level and when used in tandem with the geofencing feature, it provides you data like, how much fuel was filled in which jurisdiction. This data is used for accurate IFTA reporting.
There GPS tracking system will also provide you other data relating to the movement of your vehicle like, the distance traveled, average speed, optimum speed, driver details, idling time, driving time, breakdown history, wear and tear data and lots more. All this data is used to determine various areas of improvement.
The Benefits of Using a GSP Fleet Tracking System
A GSP tracking device gives you real-time data relating to your vehicles and the traffic on the route. This allows you to redirect vehicles away from congested areas to make sure your packages are delivered on time every time.
Improved Response Time
A GPS system can greatly improve your customer service by reducing the time it takes to service a customer. Since the GPS provides you will real-time data relating to your vehicles, you will be able to effectively direct resources towards your customers to provide them the shortest wait times.
Improved Fuel Efficiency
Fuel data relating to the various trips can be analyzed and provide insights as to where fuel is being wasted or not used efficiently. The idle time of the vehicles can be reduced and the load per vehicle can be adjusted to provide optimum fuel efficiency.
One of the main factors in ensuring your vehicles provide you the longest lifespan possible is servicing them on time. The data from these GPS systems can be analyzed to determine when a vehicle needs service or when the parts need to be changed. This can improve road safety as it will reduce mishaps due to mechanical failure.
The GPS fleet tracking system can provide you vital vehicle data like the speed at which the vehicle is moving, the amount of time it has been moving, and the variation in the speed. This can allow you to determine if your driver is overspeeding or being unsafe in the vehicle. The time spent by the driver behind the wheel can also be monitored, to ensure none of the drivers are being overworked or suffering from driver fatigue.
There are a number of ways to improve and streamline your trucking business, the GPS Fleet Tracking systems being one of the most effective ways. These systems can pair with other software to provide you a seamless fleet management interface and can be used for important documentation like IFTA reporting. So if you’re looking to give your supply chain a boost finding a high-quality GPS fleet tracking system and other fleet management software is what you need.
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