International Fuel Tax Agreement Law and Legal Definition

The International Fuel Tax Agreement (IFTA) is an agreement between tax departments in Canadian provinces and U.S. states, to simplify the reporting of fuel taxes by interstate motor carriers. An operating carrier with IFTA gets an IFTA license and one decal for each qualifying vehicle it operates.

On registering under the International Fuel Tax Agreement, haulage firms can file a single quarterly fuel tax report. This report is used to determine the net tax or refund due to each jurisdiction. The report also helps in redistributing taxes from collecting states to states that it is due.

The 48 contiguous states are all members of the International Fuel Tax Agreement. Alaska, Hawaii, and District of Columbia are not covered by IFTA. The agreement also covers the ten provinces of Canada. It does not cover the three territories of Canada, which are the Yukon, Northwest Territories or Nunavut.

The following is an example of a federal statute defining the term:

Pursuant to 49 USCS § 31701, ‘International Fuel Tax Agreement’ means the interstate agreement on collecting and distributing fuel use taxes paid by motor carriers, developed under the auspices of the National Governors' Association.