IFTA/Motor Carrier Frequently Asked Questions

Do I need an IFTA license?

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. The license and decals must be renewed annually and quarterly reports must be filed to maintain valid IFTA credentials.

*Member Jurisdictions - The 48 contiguous states of the US and 10 Canadian provinces

What is a qualified motor vehicle?

IFTA defines a "qualified motor vehicle" as "a motor vehicle used, designed, or maintained for transportation of persons or property and:

• Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 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.

Farm plated vehicles and school buses meeting the definition of "qualified motor vehicle" will need to obtain an IFTA license and fuel decals if they are traveling in another jurisdiction where they are required.

What is my base jurisdiction for IFTA licensing?

IFTA defines "base jurisdiction" as the member jurisdiction where your "qualified motor vehicles" are based for vehicle registration purposes and:

• Where the operational control and operational records of the licensee's "qualified motor vehicles" are maintained or can be made available.

• Where some travel is accrued by "qualified motor vehicles" in the licensee's fleet.

How do I get an IFTA application?

STOP!! If you do not travel outside of Michigan, you do not need a Motor Carrier license after April 1, 2003.

If you operate qualified motor vehicles interstate you will need to complete an application form to receive your IFTA fuel tax license and decals.

• New licensees will complete Form 2823, Michigan IFTA Fuel Tax License Application.

• Renewal licensees will complete Form 3014, Renewal Application For Michigan IFTA Fuel Tax License.

The mailing address is listed on the application. You can also fax your application to the Special Taxes Division, IFTA Unit at (517) 636-4593. Processing of applications can take up to 30 days. There is no fee for an IFTA license and decals. Incomplete information may result in lengthy delays in processing your application. Please review your application for accuracy prior to submission.

Once your application is processed you will receive your IFTA credentials which consist of one license and the number of decals for which you applied. It is your responsibility to make copies of your license and place a copy in each "qualified motor vehicle". Once you are licensed, the department will mail an IFTA quarterly fuel tax return to your address of record each quarter.

How can I contact the Michigan IFTA office?

The Michigan IFTA telephone number is (517) 636-4580. Applications or correspondence should be mailed to:

Michigan Department of Treasury
Special Taxes Division, IFTA Unit
P.O. Box 30474
Lansing, MI 48909-7974

You may also e-mail us at IFTA_Licensing@michigan.gov - The department cannot respond to confidential correspondence by e-mail. General questions will be answered via e-mail, however account specific questions will be answered by telephone or US mail.

I'm no longer in business. How do I cancel my account?

A request to discontinue your account must be made, in writing, within 15 days from the date of discontinuance. Form #4460 (IFTA Cancellation of Account) is available on our website.

Failure to submit a cancellation request timely will result in your account remaining active and quarterly fuel tax returns are required or estimated bills may be issued.

The IFTA Agreement requires all unused decals to be returned and all used decals to be destroyed upon cancellation.

You are responsible for filing all tax returns that are due prior to the date the account was officially discontinued. On your final IFTA fuel tax return check the box on the top right which says, "cancel license".

What are the phone numbers for the Departments I may need to contact?

• Michigan Public Service Commission (MPSC) - single state registration (517) 241-6030

• Federal Heavy Vehicle Tax or Highway Use Tax - 1(800) 829-4933

• Michigan Center for Truck Safety - 1(800) 682-4682 or (517) 321-1951

• International Registration Plan (IRP) - (517) 322-1097
                                                         (517) 322-1058 fax

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IFTA/Motor Carrier Licensing

Can I get an IFTA license even if I don't leave Michigan?

No. IFTA requires interstate travel. Zero mileage or Michigan only travel is not eligible for IFTA licensing. Quarterly returns are required for all current IFTA licensees regardless of activity. Three quarters of ineligible travel may result in cancellation and non renewal of the account.

Through a wire service, temporary fuel trip permits are available 24 hours a day for unexpected interstate travel. Call IFTA at (517) 636-4580 or view a list of current wire services.

I am a new IFTA licensee. I mailed my NEW application but I have not yet received my license or decals. Can I start operating under IFTA without them?

No. If you travel outside of Michigan prior to receiving your IFTA credentials, you must contact each jurisdiction you will travel through for a Temporary Fuel Trip Permit.

I am operating a qualified motor vehicle but I am traveling interstate on a short-term basis. Am I required to be licensed for IFTA?

No. In Michigan you have the option of purchasing a Temporary Fuel Trip Permit through a wire service. Michigan limits the purchase of trip permits to 3 per year. Travel exceeding these limits requires IFTA licensing. You may need to purchase a Temporary Fuel Trip Permit for each state you will travel through while operating your qualified motor vehicle. Contact numbers for individual jurisdictions can be found on the IFTA, Inc. web site at www.iftach.org. View a current list of wire services.

I am a current IFTA licensee. I mailed my RENEWAL application but I have not yet received my license or decals for next year. Can I continue to operate without them?

The IFTA Agreement allows a two-month grace period from January 1st - February 28th for current IFTA licensees to operate under the prior year license if they have already submitted their application to their base jurisdiction. Michigan applications are due December 1st.

Beginning March 1st all qualifying vehicles must carry the current year license and decals. The IFTA Agreement requires that vehicle operations during the grace period must be reported on the 1st quarter IFTA report.

I submitted my RENEWAL application on time. Why haven't I received my license and decals?

Please allow at least 30 days for processing your application. There may be several reasons for extended processing time. Incomplete sections on the application may result in delays.

Here are some of the most common errors:

• Incomplete officer/partner/member information (Section 22a on Form 2823 or Section 19 on Form 3014)
• Missing or invalid FEIN or Social Security numbers
• An incomplete or invalid address
• Incomplete bulk fuel or jurisdiction information
• Amount of decal sets left blank

REVIEW YOUR APPLICATION FOR ACCURACY AND COMPLETENESS PRIOR TO SUBMISSION.

I am not the owner, officer or member of the business. What documents do I need to bring with me in order to pick up the IFTA license and decals?

• You will need to bring a fully completed and signed application. Blank sections of the form may be cause for denial.
• If you are picking up the license and decals for the business, you will need a letter of authorization signed by an owner, officer or person listed on the application. The courier's name, date and clear authorization must also be included in the letter.

I added a truck to my fleet and need an additional decal. What should I do?

You will need to complete Form 2823, Michigan IFTA Fuel Tax License Application and check box B to obtain additional fuel decals. Once processed, the additional decals will be mailed to the address of record.

If you need to place the vehicle in operation immediately, you can obtain a temporary permit by completing Form 2823 and Form 2873, Michigan Temporary Permit Application. The temporary permit is valid for 30 days and is vehicle specific. This permit replaces your fuel decals until they are received and attached to the vehicle. This permit is only valid with a current license and must be sent with Form 2823 to receive the temporary authorization.

You may fax your application(s) to (517) 636-4593. Please complete all required sections of the application to avoid delays in processing.

I traded in my truck and need new decals. My decals have been destroyed and need to be replaced. What should I do?

You must complete Form 2824, Application Claiming Lost, Destroyed, Undelivered or Stolen State of Michigan Fuel Decals, and mail or fax it to our office. Our fax number is (517) 636-4593.

When the completed application is received we will issue new decals and the old decal numbers will be cancelled.

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IFTA/Motor Carrier Reporting

Do I have to file the quarterly IFTA fuel tax returns?

Yes. If you are licensed for IFTA, a quarterly return must be filed even if you had no activity for the quarter.

In order to complete the IFTA return you must maintain records of all fuel purchases and miles driven in each IFTA jurisdiction for the quarter. Failure to keep adequate records may result in disallowed credits and your fleet average MPG may be reduced to 4.0 as permitted under the IFTA Agreement.

The quarterly returns are due on April 30, July 31, October 31 and January 31 of each year. Failure to file the required quarterly returns will result in the Department issuing computed assessments against your account. If you have not received your quarterly return two weeks prior to the due date, call us at (517) 636-4580, or visit www.michigan.gov/ifta for blank forms.

Am I subject to interest or penalties if I fail to file or fail to timely file an IFTA fuel tax return?

Yes. The IFTA Articles of Agreement provide for a late payment penalty in the amount of $50 or 10 percent of the tax due, whichever is greater.

Michigan's Revenue Act also provides for a failure to pay penalty. For "Notices of Intent To Assess" issued after February 28, 2003 a penalty of 5% of the tax is added if not paid within 2 months of the date on the notice. A 5% penalty is added to each additional month or fraction of month during which the failure continues or the tax and penalty is not paid, to a maximum of 25%.

For "Notices of Intent To Assess" issued before February 28, 2003 the maximum penalty charge was 50%.

Interest is charged according to the IFTA Articles of Agreement at 1% per month or portion of a month. The annual rate is 12%. Interest is not charged on the net amount of tax due on the return but is calculated on the amount of tax due to each jurisdiction. In some cases the interest due can be greater than the net amount of tax due.

I need help with my quarterly return. Who can I talk to?

For assistance you can call our office at (517) 636-4580, Monday through Friday from 8:00 A.M. through 4:45 P.M. You may also fax your request to us at (517) 636-4593 or send your correspondence to:

Michigan Department of Treasury
Special Taxes Division, IFTA Unit
P.O. Box 30474
Lansing, MI 48909-7974

My vehicle is leased to another company. Do I need to file a quarterly return?

The Motor Carrier Tax Act specifically references lease agreements. Read the excerpt of the statute.

If you have a current IFTA fuel tax license you must file the quarterly returns reporting all of the mileage and fuel purchases which occurred under your authority. You must file a return even if you had no activity under your license but operated under a lease agreement. In this case you would attach a copy of your lease agreement and check the No Operations box in the top right corner of the IFTA fuel tax return. Three quarters of ineligible travel may result in the cancellation or non-renewal of your license.

If you enter into a lease agreement and the lessee provides you with fuel decals, issued in their name, and they have exclusive use of your equipment they are to include your activity and fuel purchases on their fuel tax reports until the lease is terminated. Under this scenario, we strongly advise motor carrier lessors to cancel their IFTA fuel tax license. By doing this you will avoid many of the problems associated with delinquent returns and computed assessments.

Protect yourself! Review all lease contracts carefully and ensure the IFTA tax reporting responsibility is clearly defined.

It is important to remember that Michigan statute holds the lessor and lessee jointly and severally liable for any fuel tax liabilities that occur during the term of their lease.

I have an IFTA decal. How do I get the latest tax rates for the jurisdictions that I travel in?

You can obtain the latest tax rate information by visiting the IFTA, Inc. Web site at www.iftach.org. Tax rates are also available at www.michigan.gov/ifta under the IFTA/Motor Carrier Taxes link.

Does registering for IFTA eliminate all other jurisdictions' tax requirements?

No. It is your obligation to be aware of each jurisdiction's fuel and vehicle regulations as well as any additional tax requirements. Links to other jurisdictions can be found on the IFTA, Inc. web site at www.iftach.org.

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