IFTA & IRP 101: What Every Fleet Needs to Know

Navigating the complexities of fuel taxes and vehicle registration is fundamental to fleet management. For those operating commercial vehicles across state lines, understanding the International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP) is crucial. This guide will explain what IFTA and IRP are, who they apply to, and the consequences of non-compliance.

IFTA is an agreement among the 48 contiguous United States and 10 Canadian provinces to simplify the reporting of fuel use by motor carriers operating in multiple jurisdictions.

Under IFTA, carriers file a single quarterly fuel tax report with their base jurisdiction, which then distributes the taxes owed to other states or provinces based on the miles traveled and fuel consumed in each.

Similarly, the IRP simplifies vehicle registration for carriers operating in multiple jurisdictions.

IRP is a commercial vehicle registration agreement between the same jurisdictions as IFTA. It allows carriers to register their vehicles in their base jurisdiction and pay a single registration fee that is apportioned based on the percentage of miles traveled in each member jurisdiction. This simplifies the process of registering vehicles and ensures that each jurisdiction receives its fair share of registration fees.

Understanding who these agreements apply to is crucial for compliance. IFTA and IRP apply to motor carriers operating commercial vehicles that meet certain criteria. Generally, these agreements apply to vehicles that operate in more than one jurisdiction and:

• Have two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds;
• Have three or more axles, regardless of weight; or
• Are used in combination and the combined weight exceeds 26,000 pounds.

Non-compliance with IFTA and IRP can result in severe penalties and consequences for carriers. These may include:

• Fines and penalties: Carriers may face significant fines and penalties for failing to file accurate and timely reports or for not maintaining proper records.
• Audits: Carriers may be subject to audits to ensure compliance with IFTA and IRP requirements. Inaccurate or incomplete records can lead to additional fines and penalties.
• Suspension or revocation of credentials: Non-compliance can result in the suspension or revocation of IFTA and IRP credentials, preventing carriers from operating in multiple jurisdictions.
• Increased administrative burden: Non-compliance can lead to increased administrative burdens, as carriers may need to spend additional time and resources to recover missing records, correct issues, and ensure compliance.

To stay compliant with IFTA and IRP, carriers should:

• Maintain accurate records: Keep detailed records of miles traveled and fuel purchased in each jurisdiction. This includes maintaining trip records, fuel receipts, and other documentation.
• File timely reports: Submit accurate quarterly fuel tax reports and annual registration renewals on time to avoid penalties and interest.
• Use technology: Utilize electronic logging devices (ELDs) and other technology solutions to streamline recordkeeping and reporting processes.

For fleet managers, navigating IFTA and IRP requirements is essential to staying compliant and avoiding costly penalties. From maintaining accurate mileage and fuel records to filing timely reports, the administrative demands can be significant—but they don’t have to be overwhelming. With J. J. Keller® Vehicle Services, fleets gain expert support to manage IFTA and IRP reporting, reduce risk, and streamline compliance. Whether you're new to interstate operations or looking to improve your current processes, our team helps ensure your fleet stays on the road—and on the right side of the law.