Data and Deadlines: Compliance Depends on Both

Corrina Peterson, Editor - Transport

June 12, 2024

 Man on laptop

Organized and accessible records are the secret to painless and penalty-free audits and reporting under the International Fuel Tax Agreement (IFTA), International Registration Plan (IRP), and state vehicle compliance programs. But tracking the required data and deadlines can be a tedious and time-consuming task.

The good news is that your efforts to set up and use efficient systems can have a double payoff, since:

  • Similar recordkeeping requirements apply under many of these programs, and
  • Jurisdictions often conduct joint audits of the programs.

Details of distance

Both IFTA and IRP require detailed records accounting for every mile traveled by each vehicle for every trip. Records must be detailed, accurate, and legible. They can be created:

  • In paper form, or
  • By an electronic logging system/device (ELD) or global positioning system.

Your distance records must be precise enough to allow an auditor to verify the reported distances and evaluate your distance tracking system.

Consider this: Does your current system allow you to easily verify the accuracy of distance traveled for all of your vehicles every month?

Fuel receipt roundup

In addition to distance records, IFTA licensees must also maintain detailed records of all motor fuel purchased, received, or used in the conduct of the business. Retail fuel purchases and bulk fuel purchases must be tracked separately.

Your records must enable an auditor to:

  • Verify the distances traveled and fuel purchased for the entire period under audit, and
  • Evaluate the accuracy of distance and fuel accounting systems for your fleet.

Consider this: Do your fuel receipts document the tax credits you’ve earned? If receipts are missing or incomplete, you’ll have to pay taxes for those gallons again with your quarterly return.

Deadline dilemmas

For many fleets, tracking deadlines for base plate renewals and state compliance reporting requirements – like the registration required for trucks operating into California – can be challenging.

Staying on top of these deadlines is critical to keep trucks on the road and avoid out-of-service orders.

Consider this: Does your current system alert you when deadlines are approaching?

The access advantage

Neither IFTA nor IRP requires a specific type of storage system for the required records. Paper or electronic/digital records are acceptable. Records can be kept:

  • Onsite,
  • At an offsite location, or
  • With a third-party administrator.

However, once you are notified of an audit by the base jurisdiction, you must be able to present those records within 30 days of the request. If using a third-party administrator, make sure they maintain all required documentation and facilitate access to records when necessary.

Consider this: Can you easily retrieve and present all required data to an auditor if needed?

Retaining records

Under IFTA, records used for the quarterly tax return must be retained for four years from the return due date or filing date, whichever is later, plus any time included under waivers or jeopardy assessments.

Under IRP, distance data may need to be kept for up to six and one-half years.

Avoid this mistake: If using ELD data to comply with IFTA and IRP, be sure to verify that records are kept for the required retention periods. Since hours-of-service data is only retained for six months, some ELD programs may not meet the longer record retention requirements of IFTA and IRP.

Consider this: Does your recordkeeping system provide the physical space or digital capacity to comply with these extensive record retention timeframes?

The bottom line

For painless and penalty-free compliance with IFTA, IRP, and other state vehicle programs, a robust and reliable system can help you:

  • Track compliance deadlines for your entire fleet, and
  • Keep complete, organized, and detailed records of distance and fuel purchases in an accessible format and for the required retention periods.

We reduce your audit risk and ensure your vehicles are legal, with accurate and reliable fuel and mileage tax data. Get expert help today!