Table of Contents
If you own a trucking company in the United States, you probably know that you have to pay a lot of taxes. Fuel permits are issued to vehicles that are not registered with the International Fuel Trade Agreement. You need a temporary fuel permit for each state that you travel through.
Every state has different criteria for when you will need a fuel permit. However, the vast majority of states require you to have a fuel permit if you drive a vehicle with a power unit of two axles and a gross volume weight of over 26,000 pounds. If you are towing a vehicle and your total weight is over 26,000 pounds, you will need to obtain a permit. You will also need a fuel permit if your power unit has more than three axles, no matter the weight of your truck.
Fuel Permits – Details
How Much Are Permits?
Temporary fuel permits vary greatly in price. They may be anywhere from $5 to $100. If you are caught without a permit, you will have to pay fines to the state.
Arizona, California, Nevada, and New Mexico require a trip permit in addition to a fuel permit. Temporary Trip Permits are considered temporary vehicle registrations. You may be able to combine single-trip fuel permits with single-trip permits.
What If I Fail To Get A Permit?
If you fail to get a required permit, you may have to pay fines to the state. You may also have to pay a large percentage of the normal state fuel tax. Some states have a set fee. If you do not pay the fee, the state may seize your truck. There will be fees added to the initial cost. You will have to pay them or lose the truck for good.
When Is A Permit Not Required
Some large vehicles do not need permits for travel. Farm equipment does not always need a permit. Self-propelled vehicles such as cranes and other construction equipment may not need a permit either. If you are simply returning to your home base, a permit is not required in most states.
Consider Registering Your Vehicles With The IFTA
The International Fuel Tax Agreement is a revenue distribution system that includes the lower 48th states and certain provinces in Canada. It makes paying fuel taxes easier for trucking companies that travel across state lines.
Whenever a driver purchases gas in a state, they will pay a certain amount of taxes on the fuel. Trucking companies have permits that detail the amount of money that they spend.
Every state has a separate tax rate for fuel. Trucking companies file a fuel tax return every quarter. As with any other tax, the trucking company will either get a refund or will owe money, depending on how much fuel they purchased in each state.
Before the IFTA was created, trucking companies had to get a permit in each state. They had to pay their taxes to that state quarterly. This was time-consuming, expensive, and inefficient.
The IFTA emerged in the 1980s. A trucking company will get one permit from an office in its home state. Whenever they buy fuel in any state they travel through, the purchase will be electronically recorded through their IFTA permit.
Each quarter, a report will be generated showing how many miles a truck traveled through each state and how much gas they purchased. The IFTA office will distribute the tax money to each state.
If you make interstate hauls regularly, you should consider getting an IFTA permit. If you rarely take interstate hauls, or if you only travel in your own state and one other state, it may make more sense to buy single-trip fuel permits.
What If I Don’t Have Time To Manage Permits?
If buying all those permits sounds time-consuming, that’s because it is. Fortunately, some companies can manage your permits for you. If you are registered with the IFTA, you need to file taxes quarterly or face fees. A full-service compliance specialist can make sure you are never late. If you are not registered with the IFTA, a management company can make sure you have all of the temporary fuel permits you need to operate.
Trucking taxes can be overwhelming. Documenting your expenses and paying your bills on time will help you stay straight and narrow.
For more information on this, please visit simplexgroup.net/tax-preparation-filing/.