The International Fuel Tax Agreement — also known as IFTA — is a fuel tax collection and sharing agreement for the redistribution of fuel taxes paid by interstate commercial carriers. There are 58 member jurisdictions of IFTA, including 48 American states and 10 Canadian provinces.
By requiring commercial carriers to pay fuel taxes proportionally, according to the miles driven in each state or province, the agreement ensures that each jurisdiction has its fair share of revenue to put towards roads and transportation. Historically, motor fuel taxes have funded transportation. The first fuel taxes of 1919 and the 1-cent gas tax, formalised in 1933, were instituted to help balance the federal budget and pay for public works to boost the economy. In 1956, it was decided that fuel tax revenue should be directed to the new Highway Trust Fund for supporting the growing Interstate System and highways.
Under the IFTA agreement, qualified motor carriers can obtain an IFTA licence for their motor vehicles allowing them to travel through other IFTA jurisdictions and submit only one quarterly fuel tax return in their base jurisdiction for fuel usage. If motor carriers aren’t registered with IFTA, they must comply with the fuel tax reporting guidelines of each individual jurisdiction in which they travel, which may include purchasing fuel trip permits. IFTA (International Fuels Tax Agreement ) is an important part of IFTA fuel .