International Fuel Tax Agreement An 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 1 st 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 15 th 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. Alberta British Columbia Manitoba Newfoundland Nova Scotia Oklahoma *Prince Edward Island* Quebec

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 NEW E-File Application TidalMainframeTACSTIFTAPRPC Permanent Account Profile Clearinghouse

E-Filed Application Paper Application Keyed into E-File Program TIDAL S02 RUNS TIDAL S01 RUNS Data Extracted and held for TC-35 Program TC-35/76 picks up E- Filed Applications TC-35/75 picks up Paper applications Data is processed and uploaded FOR TIFTAP A cross check against TACS is completed. TACS Data will override application data in TIFTAP Once Data is confirmed it is LOADED into TIFTAP TC35/760 runs and extracts data. Data is placed in P:TC35\760\Protrans RPC manual job processes extract and creates RPC Profile TC35/715,TC35/740, TC35/750 Job Reports created Errors on TC35/715 and TC35/740 processed manually. Licenses and Decals manually pulled from storage and mailed by our mailroom based on TC35/740 and TC35/750 All jobs must run as scheduled.

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.

The Clearinghouse

Funding