How to Calculate Miles for IFTA: 3 Easy Methods
What is IFTA? The International Fuel Tax Agreement (IFTA) is a fuel tax arrangement between the contiguous United States and the majority of the Canadian provinces. It simplifies and centralizes fuel tax reporting, making the process easier for both fleet owners and jurisdictions.
But to abide by IFTA regulations, truckers must file quarterly IFTA taxes and reports. And a major part of that process—and the least pleasant part, at that—involves reporting on the miles driven and the fuel consumption in each state.
Want to know how to calculate miles for IFTA?
This guide will show you three methods to use to calculate these taxes.
What Does IFTA Expect from Owner-Operators and Fleet Operators?
In order to legally transport people or goods throughout inter-jurisdictional regions, a commercial vehicle’s owner must apply to register with the IFTA. The registration process takes place in your base jurisdiction. Also referred to as your home state, this is the location where the vehicle is registered and the operation is controlled.
Upon approval, every registered vehicle will receive an IFTA license and two IFTA decals, with each decal expiring on January 1st of the following year. From there, owner operators are expected to complete IFTA reports and send in taxes due on a quarterly basis. IFTA report deadlines are:
- April 30th
- July 31st
- October 31st
- January 31st
If an owner fails to file a quarterly IFTA return by the deadlines, they have 30 days to complete the IFTA requirements before their drivers’ licenses get suspended.
Additionally, the IFTA requires the licensee to maintain a robust accounting of fleet activity covering a window of at least the most recent four years. This will include an array of information on related activities, such as total gallons of motor fuel purchased and used, individual vehicle distance records, trip permits, and so on.
Failure to comply with IFTA rules could result in fines, penalties, and license suspensions.
How to Calculate Taxable Miles for IFTA
Ready to start calculating your taxable mileage for IFTA?
To begin, you must understand how the IFTA fuel tax functions. In this case, taxes are based on your fuel consumption in each state.
How do you determine that?
There are three methods you can use to calculate taxable miles, or IFTA miles.
What are non-IFTA miles, you might ask? Non-taxable miles for IFTA are simply miles driven in non-IFTA jurisdictions. This includes Alaska, Hawaii, the District of Columbia, Mexico, and a few more.
Method 1: Manual Calculations
This is by far the most tedious and time-consuming method at your disposal. It’s also the process most vulnerable to human error.
To begin, you’ll need:
- An accurate record of your state-by-state or province-by-province miles for the quarter.
- Receipts for each fuel-up at a stop, station, or depot.
- The most current IFTA tax rates for the quarter.
From there, you can follow these steps:
- Step 1: Calculate IFTA mileage per state/province per trip – For this, it’s important that the driver takes note of the odometer reading whenever they cross into a new jurisdiction and whenever they refuel. This formula looks like:
Miles in (State/Prov) = Exit log in (State/Prov) — Entry login (State/Prov)
- Step 2: Determine total mileage per state/province – Over the course of a quarter, a driver may enter and exit a state several times. So, by adding up the mileage for every trip logged within the state, you can determine the total mileage driven in-state during that time frame.
- Step 3: Add up total number of miles for every state and province entered – Repeat this process for every single jurisdiction you operated within.
- Step 4: Total your mileage – What are your total miles driven for the entire quarter? Simply add all of the figures from steps 2 and 3.
Method 2: Trip Mileage Calculator
The next option automates some aspects of the manual calculation. Instead of having to remember to track the odometer every time your truck enters, exits, or fills up, you can use a trip mileage calculator to receive a fairly accurate estimate of miles in each state or province.
To use an IFTA mileage calculator, you must:
- Log every trip into the system, including the starting and ending odometer for each trip.
- Enter the starting location and final destination. You may also be asked about routing preferences to better improve accuracy. Once the route has been established, you’ll receive details on the miles traveled in each IFTA jurisdiction.
- Record the IFTA miles in a spreadsheet.
- Add up total miles traveled for a particular state or province.
Method 3: Easy IFTA Reporting with AtoB
Even with the help of an IFTA mileage calculator, you’ll only have an educated guess about your specific miles. And the process still takes time.
Wouldn't it be better if you could just automate the headache away?
That’s what the AtoB fuel card does.
Each time a professional driver swipes their fuel card, the transaction is logged, categorized, and stored in the system. Once documented, the reporting dashboard can help you auto-generate reports in no time.
AtoB: The Better Way to Pay for Fuel and Report to IFTA
Calculating IFTA mileage can be a major hassle that takes up too much time and energy, especially if you attempt the process manually.
But it doesn’t have to be that way. The AtoB fuel card is accepted nationwide, offers a 5¢ per gallon discount, and makes it easy to complete your IFTA reports.
Want to experience the benefits for yourself? Start your application today!
IFTA. IFTA Articles of Agreement (January 2017). https://www.iftach.org/manuals/2017/AA/Articles%20of%20Agreement%20January%202017.pdf