A Quick Guide on IFTA and Non-IFTA Miles
The mileages are the backbone of the IFTA report. Getting this wrong during the calculation is an invitation to IFTA audit and hefty penalties. Whether if you have a good understanding or not let us understand the IFTA mileages in detail in this article. By the end of the article, you will have a good understanding of IFTA and non-IFTA miles for your heavy highway use tax.
The first question is what are Total IFTA miles? Total miles means the miles your fleet ran in the jurisdiction areas in the quarter. It covers the IFTA miles; it does not include non-IFTA miles and non-taxable miles. What are IFTA miles? The international fuel tax agreement miles or IFTA miles are the distance your fleet ran in all the jurisdiction areas. It also includes distances to mechanic shops, conveyance and deadhead miles. The personal conveyance and just deadhead miles have to be included in the report. Drivers can explicitly mention the cause in the IFTA audit.
Reporting all the miles including the above is very beneficial for the trucking owners. This will help benefits in getting higher MPG. Fuel consumes with higher MPG means lower taxable fuel per jurisdiction. This greatly helps to lower the IFTA tax balance. The non-IFTA miles are the miles covered by your vehicle in the areas of non-jurisdiction.
The non-jurisdiction areas are Alaska, Hawaii, District of Columbia, Yukon Territory, Northwest Territory, Nunavut, and Mexico. The distances covered in the areas are called the non-IFTA state miles. Every state has some unique exemptions. Nontaxable miles are not subjected to heavy highway use tax. The exemptions are also of different types. They are fuel exemptions, distance exemptions and vehicle exemptions. These exemptions vary from year to year.
Some of the examples of exemptions areas are Forest Roads in California, Agricultural Roads in Utah, Trip Permits in New York, Pike Miles or Toll Roads in Massachusetts. Some jurisdictions exemptions in the form of fuel permitted. This means if you buy a fuel permit the miles drove will not be under the tax. It is very important to know about these exemptions and when to utilize. Not only it will help you in saving taxes but also help in filing the IFTA report accurately. To know what is IRP miles. It is the IRP mileage which is equal to your IFTA mileage. Accurate mileage and miles covered are important in IFTA reporting.
An IFTA audit happens randomly and the miles covered are checked very closely. You will not want to get hefty fines because of the sheer ignorance of the miles covered in heavy highway use tax. You can take charge with an awesome range of IFTA tax calculators that is available to ease your responsibility. Total IFTA miles do not cover non-IFTA miles. IFTA miles are any distance covered in the jurisdiction areas and non-IFTA is the distance covered in the non-jurisdiction. Total Taxable miles do not have applicable exemption mile. The IFTA report contains only the IFTA miles.