The rules and regulations of every state are different, therefore it was very tedious work for a driver to get a permit every time he entered a different state. International Fuel Tax Agreement solves this problem and offers a unified permit that allows drivers to drive without stopping at each point of entry.

The vehicles carrying the IFTA decals allows the commercial driver to go to any IFTA jurisdiction without the requirement of a single trip permit. IFTA let them pay their taxes quarterly and save from any kind of audits. You do not need an expert to file your IFTA taxes. You just have to understand the key components of the IFTA. 

What type of vehicle needs to get an IFTA permit?

There are three types of vehicle required for an IFTA permit. The first one is the double axle vehicle with a gross weight greater than 26000 lbs. Second, are those vehicles with three or more axles. Third, are the vehicles with trailers that have a gross weight of more than 26000 lbs.

How to get an IFTA permit and IFTA decals?

To get an IFTA license or permit, the first step is to apply online at your home state and then get a print out of the application form and send it to the designated office. Once your application is processed by the authority, you will receive the decals for the current year. 

How to calculate your IFTA tax?

You can calculate your IFTA tax in five simple steps without any expert’s help.

Track your miles per state in a given quarter: The drivers need to record their miles driven in each state very carefully. Nowadays, there is various software available to track your vehicle’s mileage and give a consolidated report of mileage used in every state separately.

• Add your fuel receipts: The next thing required for the IFTA tax calculation is the amount of fuel purchased in each jurisdiction. Therefore, it is paramount to collect and record all your fuel receipts accurately. You should separate them statewide to calculate the tax accurately. These fuel receipts must contain some basic but very important information like date of purchase, types of fuel purchased, location, fuel amount in gallons, pricing per gallon etc.

• Calculate the fuel used per state: In the first two steps, you already have the total number of miles driven in a quarter and the total gallon of fuel purchased in a quarter. Now you calculate the fuel mileage by following the formula.

“There is more credit and satisfaction in being a first-rate truck driver than a tenth-rate executive”  

B.C. Forbes

Fuel mileage = Total mile divide by the total gallon

Once you have the fuel mileage, then you easily find out the fuel used in a state.

Fuel used in a particular state = Total miles driven in a state divide by the fuel mileage

• Find out how much you owe to each state: in step 3, you find out the amount of fuel used in every state. Now, you just have to multiply the fuel amount with the given rate of tax in a particular state. This will give you the amount of tax you owed to that state for a given quarter. 

• Consolidate all the figures: Now, you have already paid the tax for some state where you have purchased the fuel. Therefore, in some jurisdictions your tax may come in a negative number. But when you file your IFTA tax, all the amounts from each state must be added together to give you a consolidated figure to pay to the tax department.

There are some additional softwares that can make your IFTA calculations very easy. Traditionally, the drivers used to note down every single mile in their miles worksheet, but that was a very tedious and error-prone method that consumed a lot of time. Nowadays, there is so many cloud-based fleet management software that provides the required information with a click of a button.

Video Credit – Driver Solutions

This software gives you the mileage report for the quarter with the exact number of miles driven in each and every state. You can enter the amount of fuel purchased in the system and you don’t have to do anything else. The software does the rest for you. You follow all these simple steps with the help of technology you will never need to hire an expert to do your IFTA taxes.

Vans tend to be essentially the most significant part of these kinds of motor vehicles since they assist to maintain the economy running. They help to supply goods from 1 spot to another. They build supply chains and provide materials for the producers. They provide them to the merchants as well as the vendors.

Fantastic trucking software is end-user-appropriate. This provides well-timed info to the operators to make quick choices. With its aid, just about all the information will get recorded in the company’s databases. It can be offered in both forms that are generally web and mobile-based applications. This particular application is a perfect fit for truck businesses. It offers updates to the drivers about the shipping and delivery of the products. The trucking transport organization assists many organizations to handle product sales.

“I really like to just jump in a truck with your backpack and just drive and go somewhere.” – Piper perabo

They produce a distribution channel for your market. The particular trucks guarantee the protection of consignments. They’re preferred by many businesses as they are usually the safest method of transportation. Several fleet businesses utilize cargo carriers to make shipments. They help to deliver and also hold hefty products quickly and also efficiently. They can assist to make shipments in any jurisdiction. The 2 types of freight carriers are global and also national.

International freight companies supply goods to overseas nations. Local cargo service providers supply products within a country. Many small, as well as local companies, utilize small cargo service providers. They offer faster shipping as well but their scope can be confined to a constrained area. But they are suitable to deliver products locally and also help to make fast profits. An ideal vehicle route program can help you make deliveries in a shorter period.

Many huge-size trucking businesses use fast shipment tracking techniques. This specific program deals with and regulates the supply and storage of goods. It provides various management programs and computer softwares to the folks. These can be operated with computers. All the relevant data is saved in the directories in a precise method. It provides several pre-installed resources that can help to make your truck function efficiently. The ideal route program instructs the operator through the best routes, streets, and also lanes to save time. This specific app will save vehicles from crashes as well. In addition, it helps to sustain good relations with the drivers. This maintains a record of the tasks of your motorist.

The best pickup truck routing app offers just about all the shipping and delivery specifics quickly and promptly. It helps you to save details of all the vehicles along with their license numbers. Additionally, it offers pertinent information regarding the motorists to the business. It also notifies about the existing cargo being made via the driver. Cloud dispatch application utilizes the most recent technology to help truck organizations. It really is a kind of application that’s developed to deliver products and services electronically. This makes certain the goods get to the destination on-time. It allows drivers to get to their particular workplaces. 

Video Credit – Western Truck Insurance Services

By making use of this particular application, you can make sure that the shipment reaches in a timely manner. This specific software program has no place for human mistakes. They help to make the cargo corporation’s job easier and also less complicated. Such softwares additionally guarantee the security of automobiles. They don’t produce just about any confusion within the company. Internet-based software programs are installed within automobiles in order to track the effectiveness. They assist to provide the greatest service to the clients. This can help an organization to prosper and thrive.

It is not possible to keep all the documents physically.By utilizing this software, people can create personalized records to document their taxes directly. This software is user-friendly and can be operated by lots of people at once. Fuel tax filing lets you manage your transportation operations in a lawful manner. By filing the right taxes, the organizations confirm to the authorities that they follow all of the rules and regulations.

All of the fleet companies stick to the IFTA regulations to conduct the business operations. These regulations include things like applying for an IFTA permit after traveling to two or more districts, filing fuel tax records, and acquiring IFTA decals. Earlier the fleet organizations had to cover various kinds of taxes. Now IFTA has combined various kinds of taxes in the way of one IFTA tax. This saves people from the hassle of filing multiple paperwork for travelling to numerous cities. Several software programs and tools can be found for the purpose of IFTA filing and recording. They simplify the process of filing taxes and save your company from tax non-payments. These fuel taxes are levied on the trucking businesses who travel in the provinces of USA and Canada.

People sign in to the IFTA website site to register their organizations so as to pay the IFTA tax. passengers can register for this license after traveling to two or more jurisdictions. Companies can download and submit this application form on its site. as soon as you’ve got the IFTA permit, it becomes simple to get the IFTA sticker. This sticker allows commercial vehicles to travel anywhere to do business. It also shows that the fleet companies have paid their fuel taxes timely and correctly. IFTA decals are offered to the organizations who have submitted their IFTA taxes on time. Earlier, the transportation supervisors relied on the manual data given by the vehicle operators to submit this tax. This required plenty of time and there were chances of errors in IFTA computation’. IFTA software programs assist individuals to submit the proper tax reports and save the company from penalties and fines.

Video Source: ClassADrivers

Computerized tax compliance saves your time and energy. Freight organizations utilize many softwares and tools to file their fuel taxes. People can scan or mail their tax reports electronically and protect themselves from tax audits. An IFTA software has the fuel tax calculator to help you compute your taxes in an accurate way. It assists people to submit their taxes directly and will save their time.

I don’t think there’s any real motivation for somebody to be a truck driver. Mine was simple; dad was a truck driver, I wanted to own one. Lindsay Fox

Submitting fuel taxes electronically is the fastest and the most convenient means of submitting taxes. This software program offers timely alerts which help the transportation companies to pay the fuel taxes on time. A fuel tax yield is a process of submitting your fuel taxes by presenting all the information on the fuel consumed and calculate mileage fuel tax.

Using IFTA software to file your tax reports helps fleet organizations to conserve their energy and time. This is why the transportation industry is paying for IFTA softwares these days. These softwares are operated by the business owners, managers, workers, and drivers. They are easy to work with and require no specialist schooling. This software assists you in putting together, filing, and calculating your tax returns. It saves your company from the hassle of documentation and enables them to handle their other work.

Talking from the perspective of the transportation companies, sales tax and transporting companies are closely related to each other. A lot of individuals do pay the optimum amount of tax. Apart from that, to saving tax, one can establish a transportation company. Here are some of the ways by which sales tax can be saved by establishing your own transportation company.

Handle The Transportation Company
The prime step towards saving the sales tax is to structure a transportation company. This is the very first step in saving sales tax. One must create and establish a transportation company to get the tax benefit.

The fundamental requirement is to establish a separate LLC. LLC stands for the Limited Liability Company. Therefore, the transportation company that an organization or an individual will be established must be a Limited Liability Company. In this situation, the operating company will be owning the majority of shares of the LLC. There is a regulation, in many of the states, that LLC cannot be a fully owned subsidiary of the company that operates it. Rather than this, the company has to be a separate entity that pays its own returns and taxes to the federal government.

Transfer To Transportation Company

The other prime requisite is to transfer all the qualified vehicles from the operating company to the transportation company. Either leased or owned, all the vehicles must be transferred to the transportation company. In the circumstances that if the vehicle is leased, then the lease agreement will be revised. A new agreement will be formed where the vehicle will be registered again. For this purpose, one can go to the trucking management software. As all the things are being allotted to the transportation company, the proper agreement between the parent and the transportation company must be made with clear terms and conditions.

“There is no situation like the open road, and seeing things completely afresh.” — James Salter

Services That Are Provided by the Transportation Company to the Parent Company

The major service that a transportation company will offer to the parent company is offering a transportation services agreement.

Services That Are Provided by the Parent Company to the Transportation Company

These are some of the services that a parent company will offer to the transportation company:

Employee Leasing Agreement
Management Services Agreement
Operating Agreement
Creation of own Set of Books

By performing all the above-mentioned activities, separate entities will be created. These entities will perform functions on their own. This, in turn, will make the tax filing return simplified. Therefore, in the long run, sales tax will be saved to a major extent.

Evaluating the Operations

It is obligatory to follow all the rules and regulations that have been laid down by the higher authorities. Therefore, it is mandatory to evaluate all your operations and activities from time to time. The organization must make sure that all the activities are being carried down as per the norms of the agreement.

For this purpose, the organization must make sure that all the trucks are being used for business and commercial activities only with the help of truck mapping software. Avoid any kind of personal use. In case, if a business is found violating the rules, then there are high chances that the business will be forfeited. Apart from that, the goodwill of the business will suffer to a major extent.

Use the Word Hire

Another task that will save your sales tax to a great extent is to use the word “to hire” on all of the trucks. This must be done for both of the companies, i.e, the parenting company as well as the operating company.

By doing so, it will be clearly understood that all the trucks are being used for commercial activities rather than personal use. In addition to this, the third-party benefits will also become a part of your business. Therefore, by doing so, the business profits will be enhanced and the risk will be reduced to a great extent.

Video Credit – Zmodal

In the nutshell, one can say that, by following the above-mentioned tips, one can surely save sales tax. Besides that, establishing a transportation company that operates on its own is a very good and profitable medium to save the sales tax. For undergoing this process, one must consult the accounting agencies so that each and everything can be done in an effective as well as efficient manner.