Blogs

A blue semi-truck is parked between two others on gravel, framed by trees. Bold text on a red and navy background reads: "International Fuel Tax Agreement. IFTA License And Decals."

March 29, 2023

IFTA License and Decals: How to Apply and Qualify for Them

Understanding IFTA: What It Is and Why It Matters

IFTA is the short form for an International Fuel Tax Agreement adopted in 1996. According to this agreement, commercial carriers and drivers need to pay the Fuel Taxes across all the states they are traveling.

Regardless of where they purchase the fuel, they must pay these taxes. Each state across the country has its own IFTA requirements. That means they will charge their fuel tax and pay to the relevant state or province.

Before the IFTA came into existence, every carrier needed to register in every state that they entered. They had to stick decals on their vehicles which were proof that they had already registered in that state.

The trucking company would take on the responsibility of ensuring that the proper fuel tax amount was paid to the respective state or province. They would also have to make sure that proper refunds were collected. IFTA simplified the entire process.

Right now, 48 American states and 10 Canadian provinces are the participants of this agreement. If as a carrier, you obtain a single IFTA license for your vehicle, you are good to go and allowed to travel across all the IFTA jurisdictions. Just submit one quarterly fuel tax return and that’s it.

IFTA License and Decals: Key Considerations to Keep in Mind

  • With the help of the IFTA license and decal, the payment of fuel taxes to multiple jurisdictions becomes more simplified and much faster
  • If as a trucking company or motor carrier, you operate across two or more states, you will be subject to the IFTA license requirements
  • You can simplify IFTA reporting even further by associating with a reliable and trustworthy third-party administrator.

Are You Eligible for an IFTA License and Decals?

If your motor vehicle has been built and is being used to transport property or people in addition to the following, you are going to qualify for an IFTA license:

  • Vehicle has two axles and if the gross vehicle weight is more than 26,000 lbs
  • The vehicle consists of any part that has 3 or more axles
  • Vehicle used in combination and the resultant weight is more than 26,000 lbs
  • If you are a motor carrier that drives or operates the vehicles described above, you will require an IFTA license
  • If you are based in an IFTA member state or province and operate across two or more member states you will require this license

How Should You Apply For The IFTA License And Decals?

You can obtain your IFTA license and decals very easily online. But as an alternative, a more stress-free way to do it is by getting in touch with your third-party administrator. They will be able to determine whether your company requires an IFTA license or not.

They will fill up the IFTA application form on your behalf and administer it by the Department Of Transportation or the tax collection agency of the state you live. If you need to apply for additional decals and make account changes, you can do that with the same form.

IFTA License Application: What Documents and Information Are Required?

  • Your USDOT number 
  • Registered business name 
  • Mailing address 
  • Federal business number

Your provincial or state IFTA Authority is going to issue you your IFTA for the current year as soon as your IFTA license application is processed. Until that time, you will have to hold on to the temporary license that you will receive by fax from the authorities.

Understanding the Validity of Your IFTA License

Your IFTA license and decals are going to expire every year on 31st December. You will have until the first of March of the following year to obtain your new IFTA license.

Do You Need More IFTA Decals?

The IFTA issues two decals to a trucking company or carrier for each licensed vehicle they have, and they must display one decal on each side of the truck cab.

Once you receive your license, file a quarterly international fuel tax agreement return on every due date. The deadlines for the same or as follows:

  • 1st quarter (Jan. to March)—April 30
  • 2nd quarter (April to June)—July 31
  • 3rd quarter (July to Sept.)—Oct. 31
  • 4th quarter (Oct. to Dec.)—Jan. 31

In addition, you have to track the miles traveled in every state. Encourage your drivers and fleet managers to work together and ensure that they know the exact amount of fuel consumed across each state and province. The details need to be accurate and recorded without fail.

Also, record the odometer readings in addition to fuel purchased in every state. This consists of the total gallons of fuel that they have purchased in every province. They may retain the original receipts and invoices as proof of purchase and must also calculate the total miles per state. They should also calculate the number of miles for every jurisdiction that they have travelled through.

The easiest way to do that is to hand over all your records, receipts, invoices, and readings to your DOT third-party administrator. They will do the needful and also calculate the tax return that needs to be filed every quarter.

Final Thoughts

So, these were a few things about the international fuel tax agreement and decals that you should always be aware of.

For more information, you should connect with your third-party administrator or DOT compliance facilitator right away. They help you stay compliant throughout the year. 

FAQ

What Happens If You Fail a DOT Inspection?

If the vehicle or driver is deemed unsafe, they may be placed out of service, meaning the vehicle cannot operate until all violations are properly corrected.

Who decides which level of inspection to perform?

Both the Commercial Vehicle Safety Alliance (CVSA) and the Federal Motor Carrier Safety Administration have a part in DOT inspection levels. The CVSA develops the criteria and sets the procedures for every inspection level. The FMCSA establishes overall regulations and determines which vehicles must be inspected.

How often do DOT inspections happen?

DOT inspections can happen at any time. They most commonly happen during roadside stops and weigh stations. Carriers with higher risk, poor safety records, or hazardous material may be inspected more frequently.

What documents are required during an inspection?

Documents required during an inspection include but may not be limited to:

  • State driver’s license or commercial driver’s license
  • Medical examiner’s certificate
  • Record of duty status
  • Vehicle registrations
  • Periodic inspections document for all vehicles being operated
  • Shipping papers or bills of lading
  • Information for hazardous materials being transported
  • Proof of insurance

What are common DOT inspection violations?

According to the FMCSA, the 5 most cited roadside violations are:

  1. False Report of Driver’s Record of Duty Status: log falsification providing inaccurate or intentionally altered duty-status information.
  2. No Record of Duty Status (ELD Required): using a commercial vehicle without the required electronic logging device or valid time records.
  3. Inoperable Required Lamp: crucial lights (headlights, brake lights, turn signals, etc.) are not functioning properly.
  4. Operating a Commercial Motor Vehicle Without a Commercial Driver’s License (CDL)
  5. Operating a Commercial Motor Vehicle Without Proof of a Periodic Inspection: failure to meet FMCSA the maintenance standards of a required annual inspection.

Why is updating VMT important for compliance?

VMT is tracked to determine fuel tax obligations (Vehicle Miles Traveled Tax) used for road maintenance and improvements. Trucking companies must keep accurate records of VMT to ensure they pay the correct amount of taxes.

How often should VMT be updated?

For motor carriers VMT must be updated every two years along with the MCS-150 form for the Biennial Update.

Can VMT be tracked automatically with technology?

Yes, Electronic Legging Devices (ELDs), Fleet Management Apps, and Mileage Tracking Software are all technological advancements that can simplify the process of VMT tracking.

How does VMT affect taxes and fuel reporting?

Accurate VMT records help document mileage for business-related tax deductions, ensuring compliance with IRS regulations. It also supports fuel tax reporting by tracking the miles each vehicle travels in different jurisdictions, which is essential for state and federal fuel tax calculations. Proper tracking reduces errors, prevents penalties, and provides a clear record of operational costs.

How do I know when my Biennial Update is due?

  • Your filing schedule depends on the last two digits of your USDOT number. The last digit corresponds with what month the form needs to be filed in. January is 1, February is 2, March is 3, etc. The next to last digit determines the year (odd-numbered year or even numbered year). For example, DOT number 1234567 files their biennial update in July (7) of every even year (6). Contact us today to see if you’re due.

Does the Biennial Update cost money to file?

While you can file your Biennial Update yourself for no cost through FMCSA. The process can often be confusing and time-consuming. Our team can handle your filing for you, simplifying the process for you.

Do intrastate carriers need to file the update?

Yes, even if carriers stay within state lines, a biennial update is still needed for their USDOT number.

What happens if I miss my filing deadline?

  • Failure to complete biennial update to FMCSA can be subject to fines with a maximum penalty of $10,000. If your update is past due, you can still file it to restore your compliance status. Contact us today to file your form! https://dotcompliancegroup.com/bu-update/ 

What are the new FMCSA rules in 2025?

  1. Civil Penalty Amount Increases
  2. Drug & Alcohol Clearinghouse Becomes Exclusive Source for checking driver history.
  3. ELD Technology Required
  4. SMS (Safety Measurement System) Modernization
  5. Crash Preventability Determination Program Expanded

When do the 2025 FMCSA regulations take effect?

The confirmed dates these regulations take effect is May 30, June 23, October 1, 2025.

How can trucking companies prepare for these changes?

Regularly reviewing your Safety Measurement System (SMS) scores and maintaining personal checklists for inspections, driver qualification files, and drug and alcohol testing helps catch issues before they affect audits. Partnering with DOT Compliance Group streamlines filings, reporting, and ongoing monitoring, taking the guesswork out of FMCSA regulations and keeping your operation audit-ready year-round.

What Triggers a DOT Compliance Review?

A DOT compliance review is triggered when FMCSA wants to ensure a carrier is following safety regulations. Common triggers include high SMS safety scores, a history of crashes or violations, and previous noncompliance. Staying proactive with accurate records, driver files, and regular internal audits helps reduce the likelihood of a review.

Where can I get help with FMCSA filings?

DOT Compliance Group can assist with any help or questions you may have about FMCSA filings. Call 972-476-9962.

How long are violations kept on record?

According to the Clearinghouse rules, drug and alcohol violations remain in the FMCSA Clearinghouse for five years, provided all requirements (such as completing the return‑to‑duty process) have been met before that period ends.

What if an employer makes a mistake in reporting?

In practice, correcting an employer reporting error typically involves identifying the mistake in the database and then submitting a request for correction through the Clearinghouse portal or FMCSA procedures, so the record reflects accurate information. 

What are the penalties for non-compliance?

FMCSA rules allow civil penalties for non‑compliance, and separate authorities note that employers who fail to meet Clearinghouse requirements may face civil fines or criminal penalties under federal regulations.

Do trucking companies check the Clearinghouse?

Yes — trucking companies check the Clearinghouse as part of their hiring and compliance process. The FMCSA Clearinghouse is designed so employers can search a driver’s drug and alcohol violation records before permitting them to operate a commercial vehicle. Employers are required to conduct these queries for both prospective and current drivers as part of compliance.

0 Comments

Submit a Comment