Navigating IFTA Reports: A Comprehensive Guide

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What is the International Fuel Tax Agreement, what does it consist of, and why is compliance important? If you operate a qualifying motor carrier business in the U.S. outside Hawaii or in Canada, IFTA imposes regulatory obligations on your company and forms a critical component of your accounting and tax planning strategy. Efficient IFTA reporting can save you significant time and money, while poor IFTA report management can cost you financial penalties and even put you in legal jeopardy. In this comprehensive guide, we'll walk you through what you need to know to navigate the IFTA reporting process and stay in compliance while saving money.

What is IFTA? An Overview for Transportation Professionals

The International Fuel Tax Agreement is an accord governing qualifying motor carriers who pay fuel taxes in more than one state or provincial jurisdiction in the United States and Canada. It simplifies tax collection by applying fuel tax payments to an ongoing account and using quarterly reports to assess tax liabilities to each jurisdiction.


Operators pay taxes and receive refunds from the jurisdiction where their vehicles are based for registration purposes, where their operational control is centered and their records are stored or accessible, and where some travel is accrued. This is known as their base jurisdiction. Jurisdiction commissioners may elect to consolidate fleets based on multiple jurisdictions.


IFTA applies to the 48 contiguous United States and the 10 Canadian provinces bordering the U.S. Other parts of the U.S. and Canada participate voluntarily.


IFTA applies to qualified motor vehicles (QMV) used, designed, or maintained for the transportation of persons or property and meeting one of the following additional criteria:

  • Two axles with a gross vehicle or registered gross vehicle weight over 26,000 lbs. or 11,797 kgs; or
  • Three axles regardless of weight; or
  • Combined weight or gross weight exceeding 26,000 lbs. or 11,797 kgs.


IFTA carriers receive a license and decals to display compliance. Licensees file taxes once quarterly from their base jurisdiction, which handles payments, refunds, and audits.

Why Was IFTA Created?

The states of Arizona, Iowa, and Washington created IFTA in 1983 to simplify fuel tax reporting in the transportation industry. At that time, the industry was struggling with excessive paperwork stemming from obligations to comply with regulations in multiple jurisdictions and had asked Congress to intervene. Following 1984 federal legislation authorizing a review of state tax collection methods, IFTA gradually received nationwide adoption, completed in 1996.

Why Accurate IFTA Reporting Matters

Accurate IFTA reporting saves you time correcting paperwork, helps ensure you remain in compliance, avoids costly financial penalties, and can save you money if you're entitled to refunds.

Key Components of an IFTA Report

IFTA reports vary by jurisdiction, but they generally include:

  • Total IFTA miles
  • Total non-IFTA miles (traveled in areas outside IFTA jurisdiction)
  • Taxable miles
  • Taxable gallons (based on dividing taxable miles by miles per gallon)
  • Tax paid gallons
  • Net taxable gallons (taxable gallons minus tax-paid gallons)
  • Tax rate
  • Tax or refund due
  • Interest
  • Total tax or refund due after interest



IFTA forms collect this information for each jurisdiction traveled.

Mileage Tracking

IFTA requires you to track mileage for each jurisdiction traveled. Under federal law, most carriers must use an electronic logging device (ELD) to track mileage, with some exemptions, as in cases of temporary device malfunction.

Fuel Purchases and Receipts

To comply with IFTA, you must keep all receipts to maintain records on where and when you purchased fuel, what type of fuel you purchased, price per gallon, and total gallons bought.

Jurisdiction Breakdown

IFTA requires you to record information for all jurisdictions traveled. IFTA forms break down jurisdictions in rows so you can enter data for each row. IFTA reporting software can simplify this process.

Common Challenges in IFTA Reporting

The biggest IFTA reporting challenges include:



  • Estimating mileage and gallons
  • Remembering to log all miles, including unloading or personal miles
  • Remembering to record odometer or GPS problems
  • Meeting reporting deadlines
  • Failing to ensure up-to-date compliance for any software used to collect data


Failing to address these challenges can trigger an audit of your company.

A semi truck is being filled with gas at a gas station.

Best Practices for Simplifying IFTA Compliance

You can simplify IFTA compliance by adhering to recommended best practices:


  • Use routing software to optimize your mileage and minimize your fuel taxes
  • Use electronic logging devices compatible with the Federal Motor Carrier Safety Administration (FMCSA)
  • Equip drivers with paper logs for backup in the event of ELD malfunction or other emergencies
  • Use IFTA reporting software to automate your reporting processes
  • Integrate your ELD and fuel card data with your reporting software
  • Maintain all fuel receipts for at least four years after your filing date or due date (whichever comes first) in the event of an audit (six-and-a-half years is better to simultaneously ensure compliance with the International Registration Plan)
  • Conduct periodic IFTA audits to verify the accuracy of your recordkeeping system
  • Use automated notification systems to ensure you meet filing deadlines
  • Create at least three backups of all records in at least two different media (such as your local device and the cloud), with at least one copy stored in a different physical location
  • Work with a transportation tax consultation specialist to review your compliance procedures



Following these best practices can save you significant labor while increasing the accuracy of your reporting and improving the efficiency of your reporting processes.

Leverage Technology for Accurate Tracking

Technology such as ELDs and IFTA reporting software can increase the accuracy of your tracking.

Organizing and Maintaining Records

IFTA requires you to keep records of driving mileage and fuel purchases. You must maintain records for at least four years, but six-and-a-half years will also ensure International Registration Plan compliance.

Consequences of IFTA Non-compliance

IFTA non-compliance can trigger financial penalties, audits, IFTA license revocation, impoundment of loads, having vehicles placed out of service, and ultimately, being put out of business.

Streamline Your IFTA Reporting with Transportation Tax Consulting

Given the consequences of IFTA non-compliance and the labor involved in achieving compliance, streamlining your IFTA reporting should be a priority for your business. Transition Tax Consulting provides you with motor fuel tax advisory services to assist you with achieving compliance efficiently. We reduce your risk of non-compliance by providing you with accurate calculations, compliance guidance, and audit support for fuel taxes. We leverage our expertise and industry insights to offer tailored strategies and solutions, ensuring your transportation tax needs are met efficiently and effectively. To further assist you, our site includes state tax forms, industry resources, and answers to FAQs. Contact us to schedule a consultation and discuss how we can help you streamline your IFTA reporting processes to save you time and money.

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By Matthew Bowles December 20, 2025
During the COVID-19 pandemic, government leaders across the United States delivered a clear message: motor carriers are essential . While offices closed and travel stopped, trucks kept moving. They delivered food, medical supplies, fuel, and consumer goods that allowed the economy—and daily life—to continue. Yet once the crisis subsided, trucking returned to its familiar regulatory position: critical to society, but treated as a competitive service rather than a public utility. This contradiction raises an important question—especially in unidirectional states where freight flows heavily in one direction: If motor carriers are essential, why are they not considered public utilities? The answer lies not in the importance of trucking, but in history, law, and economic philosophy. Motor Carriers Function as Essential Infrastructure Motor carriers for hire form the backbone of the American supply chain. In unidirectional states—those shaped by ports, agriculture, energy production, or geographic constraints—trucking does far more than move freight. It sustains local economies, supports national commerce, and ensures access to basic goods. These states often suffer from structural imbalances. Trucks haul freight in one dominant direction and return empty or underutilized. That imbalance increases costs, discourages market entry, and makes service less reliable during downturns. Despite these challenges, motor carriers must still meet public expectations for reliability. Grocery stores must stay stocked. Hospitals must receive supplies. Manufacturers must ship products. Functionally, trucking in these states resembles a public utility—even if the law does not say so. Essential Does Not Mean Public Utility During COVID, governments used the word essential deliberately. The designation allowed drivers to keep working, relaxed certain compliance rules, and ensured access to fuel and infrastructure. It solved an immediate problem: keeping freight moving during an emergency. Public utility status, however, creates permanent obligations. Utilities must: Serve all customers in a defined area Provide continuous service Operate under regulated pricing Accept limits on market exit COVID policy addressed short-term continuity. Public utility classification would have required a permanent restructuring of the trucking industry. Policymakers avoided that step. Deregulation Changed Trucking’s Legal Identity Before 1980, interstate trucking looked much closer to a public utility. Regulators controlled: Market entry Routes Rates Service obligations The Motor Carrier Act of 1980 dismantled that system. Congress chose competition over regulation, believing market forces would lower costs and improve efficiency. That decision permanently altered trucking’s legal status. COVID did not reverse deregulation. It merely confirmed that deregulated carriers still perform an essential public function—without public utility protections. Why Motor Carriers Are Not Treated Like Utilities Several structural differences keep trucking outside the public utility framework: No Obligation to Serve Motor carriers may choose their customers, lanes, and freight. Public utilities cannot. Market-Based Pricing Trucking rates fluctuate with supply, demand, fuel, and capacity. Utility rates are regulated for stability and cost recovery. No Infrastructure Ownership Utilities own and maintain their infrastructure. Motor carriers rely on publicly funded highways they do not control. Full Market Risk Carriers absorb economic volatility, fuel swings, and downturns. Utilities recover costs through regulated rates. These differences explain why policymakers resisted utility classification—even after calling trucking essential. The Policy Contradiction COVID Exposed The pandemic revealed a fundamental contradiction: Motor carriers are too important to fail Yet they receive none of the protections given to public utilities During COVID, carriers absorbed extreme risk while keeping the economy running. Utilities, by contrast, benefited from guaranteed revenue mechanisms and regulatory certainty. In unidirectional states, this imbalance becomes more pronounced. When carriers exit unprofitable lanes, communities feel the impact immediately. Supply chains falter. Costs rise. Access declines. Why the Public Utility Debate Matters Now The question is no longer whether trucking is essential—that point is settled. The real question is whether current policy appropriately reflects trucking’s role in the economy, especially where market forces alone fail to ensure reliability. Recognizing motor carriers as public utilities does not require heavy-handed rate control or elimination of competition. It could mean: Targeted protections in critical corridors Policy frameworks that recognize structural freight imbalances Regulatory consistency aligned with public benefit Long-term investment stability for carriers serving essential markets Conclusion Motor carriers for hire occupy a unique space in the American economy. They operate as private businesses, but society depends on them like public utilities. COVID made that reality undeniable. In unidirectional states and critical freight corridors, trucking already functions as essential infrastructure. The law simply has not caught up. As supply chains face growing strain, the conversation is shifting—from whether trucking is essential to whether policy should finally reflect that truth. The future of transportation policy will depend on how—and whether—regulators resolve this tension.
By Matthew Bowles December 15, 2025
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November 21, 2025
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