The International Fuel Tax Agreement (IFTA) is an agreement between most Canadian provinces and most U.S. states. IFTA makes it easier for commercial truck or bus drivers who travel between more than one jurisdiction to report the taxes on the fuels they use. As part of this agreement, registered inter-jurisdictional drivers can get one single licence issued by the jurisdiction where their activities are based. This enables drivers to report and pay taxes to only one jurisdiction, simplifying their obligations.
Taxes that are payable on fuels used by commercial drivers, such as gasoline, diesel, propane, natural gas, methanol, ethanol, and some others, are tracked and collected by all member jurisdictions. Then, based on the amount of fuel consumed and the distances traveled by the driver in each jurisdiction, members share the revenues accordingly. The distances driven and amount of fuel use in each jurisdiction are recorded and reported by the commercial driver. Not all types of commercial drivers can become licensed under the IFTA. The driver must use a vehicle that’s qualified to be registered under the agreement, which states that a qualified vehicle is one that is used, designed, or maintained for the transportation of persons or property and meets one of the following sizes and weight requirements:
- The vehicle must have two axles and a gross weight exceeding 26,000 pounds or 11,797 kilograms.
- Regardless of weight, the vehicle has three or more axles.
- If the vehicle is used with a trailer, it must have a combined weight exceeding 26,000 pounds or 11,797 kilograms.