The History of Quarterly IFTA Filing

You’ve probably heard of IFTA, but have you ever wondered how IFTA filing began or what IFTA means? Learn the history of the IFTA fuel tax here.

What is IFTA?

IFTA stands for the International Fuel Tax Agreement. It requires all carriers to have a national permit for crossing state lines and includes fuel tax rules and regulations for interstate truck drivers. The International Fuel Tax Association, Inc. (IFTA, Inc.) is the corporation that was formed to manage and administer the International Fuel Tax Agreement.

Before the IFTA Fuel Tax

Prior to IFTA, all truck drivers were legally required to have a permit for every state they crossed during transport. It was time-consuming and difficult for drivers to keep track of all fuel purchased, states crossed and fuel taxes per state. Additionally, the process for filing fuel taxes was inconsistent and often caused confusion in the following areas:

Filing timeframes
Tax/filing definitions
Record keeping systems
Guidelines
Laws

Carriers needed a more comprehensive, timely and reliable solution for managing and filing their fuel taxes.

Where IFTA Filing Began

The IFTA fuel tax was created in 1983 for carriers who frequently crossed state lines, but only three states used this model at first: Arizona, Iowa and Washington. Three other states, Maine, New Hampshire and Vermont, used a similar model known as the Regional Fuel Tax Agreement (RFTA).

Between 1987 and 1990, a new model for IFTA was introduced and adopted by additional states. Arizona established a legislative body for IFTA filing, and in 1996 nearly all states were required to adopt the IFTA fuel tax. To date, only Alaska and Hawaii are exempt from IFTA filing.

Who Requires IFTA Filing Today?

According to IFTA, Inc., a Qualified Motor Vehicle is any motor vehicle used, designed, or maintained for transportation of persons or property and:

1) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; or

2) has three or more axles regardless of weight; or

3) is used in combination, when the weight of such combination exceeds 26,000 pounds gross vehicle or registered gross vehicle weight.

To be licensed for IFTA filing, these vehicles must use diesel, propane, or natural gas. Some states also require gas-powered vehicles to be licensed.