Whether a Fleet Management Company (FMC), carrier, power-grid company, product shipper or any other company type, those with fleets staying in full compliance with both the International Registration Plan (IRP) and the International Fuel Tax Agreement (IFTA) is a must.
Companies in the US and Canada with commercial motor vehicles (CMVs) that travel out of state are required to register or renew with IRP, while companies in those countries (excluding Alaska, Hawaii and the District of Columbia) with CMVs that are IRP registered and weigh more than 26,000 pounds must also file with IFTA. And while IRP serves as a reciprocity agreement between the different US states, DC and Canadian provinces, IFTA establishes a simple method for fuel-tax reporting.
Although most motor carriers know the basics of IRP and IFTA, there are quite a few lesser-known – but still critical – facts that can catch companies off guard when it comes to staying in compliance and preventing unnecessary audits.
The compliance team at ACERTUS has compiled ten of these critical facts here to help companies get an idea of the different factors that come into play with both IRP and IFTA:
1) Companies must renew with IRP every year and file with IFTA every quarter: Companies with CMVs that renew with IRP must do so once every year, while filing with IFTA must be done every quarter.
2) The weight standard for IFTA is gross registered vehicle weight: When considering whether to file with IFTA, companies should determine whether their CMVs are over 26,000 pounds in gross registered vehicle weight (GVWR). This is not the same as a CMV’s gross vehicle weight (GVW) once it is already loaded and in operation.
3) Non-Compliance can mean payment of fines across four years: An error (also known as non-compliance) found in either an IRP or IFTA audit can mean a company is required to pay subsequent fines over the course of four years. Typically, fees are spread out over the duration of that time.
4) Two states currently require additional fuel surcharges: Currently, both Virginia and Kentucky require not just the regular IFTA registration fees on applicable CMVs that operate in those states, but also additional fuel surcharges.
5) Even if CMVs don’t travel one quarter, IFTA filing is required: If a company’s CMVs don’t travel out of state during one out of a given year, that company must still file those vehicles with IFTA if the standards apply to the vehicles throughout the rest of the year.
6) If a CMV is listed on IRP and IFTA, registering must happen regardless of whether the vehicle is transporting a load or traveling unloaded: It doesn’t matter if CMVs are traveling loaded or unloaded – if they’re listed on IRP and IFTA, companies must still renew with IRP and file with IFTA at the correct times (annually for IRP and quarterly for IFTA).
7) It’s best to remove terminal tractors from IRP and IFTA filings: If a company is using a CMV as a terminal tractor (also known as a “yard dog”) to move trailers around on a lot, it’s better to remove that vehicle from IRP and IFTA altogether.
8) It’s best to remove CMVs only operating intrastate from IRP: If a CMV doesn’t leave the state every 18 months while on IRP, the company in question can be penalized during an audit. IRP views this as not utilizing the reporting system properly. Therefore, it’s best for companies with CMVs not leaving the state at least every 18 months to no longer have an IRP account.
9) Filing multiple amendments to fix mistakes can trigger an audit: Making a lot of mistakes when filing with IFTA, and then filing numerous amendments to correct those mistakes, can throw up a red flag with IFTA and trigger an audit.
10) A CMV with fluctuating MPG or total mileage can trigger an audit: If the miles per gallon (MPG) or total mileage fluctuates a lot on a CMV between different quarters, or if the MPG or total mileage is found to be of normal range, this can throw up a red flag with IFTA and trigger an audit.
How an Expert Compliance Provider Can Help
When it comes to fleet compliance, including staying on top of IRP and IFTA standards, it can be complicated and time-consuming for companies to manage all their vehicles’ . Ideally, companies with commercial-vehicle fleets will outsource compliance work to an expert provider that can manage all compliance services, mitigate risks and keep operations moving quickly and efficiently.
The compliance team at ACERTUS has wide-spanning capabilities to help companies cover everything from permitting, apportioned vehicle registration with IRP, IFTA fuel tax reporting, Highway Use Tax (HUT) and Weight/Mile tax support and Federal Motor Carrier Safety Administration (FMCSA) standards to title-and-registration services, license plating and sticker application, safety regulations, driver qualification (DQ) files, toll and transponder management and more.
ACERTUS’ expertise doesn’t just stop at compliance, however. As the only full-scale, tech-enabled automotive-logistics platform designed to move, store, recondition and title and register finished vehicles, ACERTUS delivers proven, complete and start-to-finish service. Through a transformative combination of technology, people and experience, ACERTUS turns logistics into a competitive advantage for anyone moving vehicles.