International Fuel Tax AgreementAn Overview

What is IFTA?• Fuel Tax Collection Agreement between the 48

contiguous states.• Non- IFTA = Yukon Territory, Oregon, Hawaii, Alaska

and Mexico• Replaced the old “bingo card” system.• Requires member states to operate within the

bounds of the IFTA Articles of Agreement:– Licensing– Processing returns– Collection of revenue

• Including Audit Practices– Distribution of funds

Who qualifies for IFTA?• An interstate motor carrier operating "qualified

motor vehicles" between at least 2 member jurisdictions must have an International Fuel Tax Agreement (IFTA) license and decals issued by their base jurisdiction. – Base Jurisdiction is jurisdiction where operational

and control records are maintained or can be made available.

– Must have a physical presence in the jurisdiction to have it considered the base state.

Qualifications cont.• A "qualified motor vehicle" is "a motor vehicle

used, designed, or maintained for transportation of persons or property and:

• Having two axles and a GVW or RGVW of 26,001 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.

Application Process• Licensing for IFTA can be completed at any

point during the year.– Valid from date processed until 12/31 of that

year• Applicants complete their request online

using our electronic application.• The IFTA License is valid for one calendar

year.• Renewal of licenses occurs each November

for the ensuing year.– Licenses will be valid January 1st through end

of that year.

Requirements once licensed• Report total mileage traveled in member

jurisdictions.• Report total tax paid purchases in member

jurisdictions.• File Returns quarterly. • Majority of returns are filed on a hard copy return

mailed or faxed in.• Taxpayer do have the ability to E-file the return using

our web application.– Due 30 days after the end of the quarter.– Mailed on the 15th of the last month of the quarter

by the RPC.• Can be amended at any point.• Must provide additional information if requested

Requirements cont.• Failure to file the required tax return results

in automatic assessment.• Once an account fails to file a return within

60 days of due date, RPC notates the account as delinquent.

• IFTA Staff are then to run a Mainframe program on a semi-annual to quarterly bases to flag accounts in TIFTAP as delinquent.– This prevents relicensing by taxpayers who

have not filed

Processing of filed returns• Each member jurisdictions is required to process

incoming returns within 30 days of the received date. – IFTA Compliance Team audits records every 4 years.– Citations and fines issued for failure to comply with

this rule.– Interest is paid by Michigan for returns cleared after

30 day window.• Processed return data is extracted from the RPC

and provided to each affected jurisdiction on a monthly Transmittal report.– Includes Audit Information

CLEARINGHOUSE MEMBERS

Return data is Sent and Received electronically through web based service known as The Clearinghouse. Audit Data also processed electronically for

these members. Based on the Transmittal reports funding

is calculated as a “Net balance”. A single payment is received or sent

based on the “Net balance”.

RPC MEMBERS (NON-CLEARINGHOUSE)

Transmittal Reports and payments physically received from each member. Transmittals processed manually in IFTA Office. Payment wires sent through JP Morgan and manually

applied to account. Paper checks processed through Receipts Processing

and manually applied to account.

How it all works together

E-File Application

New/ Renewal Applications

Application submitted online.

Series of Mainframe and Tidal program jobs are activated in order to capture data.

Data is extracted, cross checked and uploaded from one system into another.

Continuous chain of data

Taxpayers visit the same site to electronically file

Applications and Tax Returns

This data is cross

referenced in TACS before uploaded to

TIFTAP

This data is collected and used for COL. Also goes to

TACS and determines authorized

parties when verifying callers.