Tax and Revenue Administration International Fuel Tax Agreement ( IFTA) Information Circular IFTA-2R7

IFTA-2R7 / October 2006

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - IFTA:
ALBERTA IFTA LICENSING AND REPORTING REQUIREMENTS

• Alberta IFTA Fuel Tax Licence and Decals
• Application Process and Eligibility Rules
• Annual Fees
• Grace Period
• Special Rule for Farm Plated Trucks
• Definition of Qualified Motor Vehicle
• Temporary, Additional and Replacement Credentials
• Reporting for Multiple Fleets
• Reporting for Intrajurisdictional Travel
• Licensing and Reporting by Lessors/Lessees and Household Goods Carriers
• Reporting and Remittance Requirements

1. The International Fuel Tax Agreement (IFTA) program is a voluntary program. Carriers registered in Alberta under the IFTA are issued credentials by Alberta Finance, Tax and Revenue Administration (TRA).
   
   
2. The credentials (licence and vehicle decals) signify to enforcement officials in other IFTA jurisdictions that the carrier reports distances travelled and fuel purchased in IFTA jurisdictions on an Alberta IFTA Fuel Tax Return. Enforcement officials will then not require the carrier to pay a single trip permit fee for fuel tax. 
   
   
3. IFTA credentials expire on December 31 of each calendar year. An Alberta IFTA registration renewal form is sent to the carrier in the autumn of each year. The new credentials are issued in advance of the new calendar year; however, carriers cannot attach the new decals to their vehicles until December.
   
   
4. Each carrier registered under IFTA in Alberta purchases one Alberta IFTA Fuel Tax Licence. The licence is not vehicle-specific and a legible copy of it must be placed in each qualified motor vehicle operated by the carrier (see below for the definition of qualified motor vehicle). The carrier purchases one set of two Alberta IFTA decals for each qualified motor vehicle. The prenumbered decals must be attached to the lower, rear exterior of each side of the cab.  Decals are designed to last for a full year. However, if problems such as fading occur contact TRA for replacements. (See below for more information about additional and replacement decals).

5. To receive Alberta IFTA credentials, carriers must apply to TRA by completing the IFTA registration form (AT2054) and enclosing applicable registration fees. A carrier may be registered for IFTA in Alberta if it:

a) operates one or more qualified motor vehicles base-plated in Alberta or the Northwest Territories,

b) travels to at least one other IFTA jurisdiction,

c) allocates some income to Alberta for income tax purposes, and

d) does not have an amount owing or an unfiled IFTA return for a prior reporting period.

6. The applicable registration fees for each carrier are:
   
   up to, and including December 31, 2006:

a) an annual registration fee of $10.00 for the Alberta IFTA Fuel Tax Licence, and

b) an annual decal fee of $5.00 per set of two decals per qualified motor vehicle.

effective January 1, 2007:

a) an annual registration fee of $15.00 for the Alberta IFTA Fuel Tax Licence, and

b) an annual decal fee of $10.00 per set of two decals per qualified motor vehicle.

The applicable registration and decal fees must be submitted with the carrier’s annual registration application.

Grace Period

7. Carriers renewing their IFTA licence and decals have a two-month grace period (January and February) to display the renewal IFTA licence and decals.

Special Rule for Farm-Plated Trucks

8. To be approved for IFTA credentials, qualified farm-plated motor vehicles travelling in IFTA jurisdictions must use only clear diesel fuel. Refunds of tax on clear diesel fuel consumed in Alberta and refunds of Alberta Farm Fuel Distribution Allowance benefits on clear diesel consumed in any jurisdiction can be obtained by filing a Farmer Benefit Application (AT4755). This application and the related Schedule 1 (AT4756), Tax-paid Clear or Marked Diesel Fuel Used in Eligible Farming Operations, should be submitted with an IFTA Quarterly Tax Return (AT2059).

Definition of Qualified Motor Vehicle

9. Alberta’s IFTA credentials may be carried on a qualified motor vehicle only. This is a motor vehicle used, designed, or maintained for transportation of persons or property and meeting one of the following size and weight requirements:

   a) two axles and a gross vehicle weight or registered gross vehicle weight exceeding 11,797 kilograms (26,000 lbs.); or

   b) three or more axles regardless of weight; or

   c) if used in combination with a trailer, a combined weight that exceeds 11,797 kilograms (26,000 lbs.).

   A qualified motor vehicle does not include a recreational vehicle.

Temporary, Additional and Replacement Credentials

10. IFTA licensees registered in Alberta may purchase additional decals for additions to the fleet, or contracting/leasing arrangements.  IFTA licensees should reconcile decals to their vehicles.
    
    For quality problems, replacement decals must be requested. For replacement decals to be issued, the carrier must provide TRA with details of the problem. 

    Decals can be obtained from the TRA offices in Edmonton or Calgary.  Please allow sufficient time for processing and mailing.

11. If a licensee requires IFTA credentials immediately, contact TRA, at (780) 427-9412 or  310-0000 / (780)427-9412 (Alberta toll-free) to apply for temporary credentials. Information about the make, model and VIN of each vehicle that would normally carry decals is required. The licensee will be faxed a temporary IFTA credential. This may be used until receipt of the IFTA decals mailed to the carrier. A $10.00 fee per vehicle is charged for temporary credentials.
    
    
12. The temporary IFTA credential must be carried in the vehicle named in the certificate together with a copy of the licensee’s Alberta IFTA Fuel Tax Licence. The temporary credential will expire in 30 days and must be replaced by the IFTA decals as soon as possible. Enforcement agencies in other jurisdictions will charge a trip permit fee for fuel tax if the vehicle operator does not display IFTA decals or carry a temporary IFTA credential together with an Alberta IFTA Fuel Tax Licence.

Reporting for Multiple Fleets

13. An Alberta IFTA licensee may have multiple fleets base-plated in more than one IFTA jurisdiction. Special permission is required to report the distance travelled by all the carrier's fleets on one IFTA Fuel Tax Return. A letter requesting permission should be enclosed with the registration form. TRA will then contact the other IFTA jurisdiction(s) and arrange approval for a consolidated IFTA Fuel Tax return. 
    
    
14. An Alberta IFTA licensee is permitted to include in its Alberta IFTA Fuel Tax Return the distance travelled by its fleets base-plated in non-IFTA jurisdictions. Alberta IFTA credentials (fuel tax licence and decals) may be requested by the licensee for each qualified motor vehicle base-plated in non-IFTA jurisdictions.

Reporting for Intrajurisdictional Travel

15. The licensee may include qualified motor vehicles in its IFTA fleet that are operated exclusively within a jurisdiction by obtaining IFTA decals for the intrajurisdictional vehicle(s). Once decaled, the intrajurisdictional vehicle(s) must report all fuel purchases and distance travelled, whether or not the vehicle(s) left the jurisdiction, until the decal(s) expire or the vehicle(s) are no longer under the licensee's authority.

Licensing and Reporting by Lessors/Lessees and Household Goods Carriers

16. A lessor who is regularly engaged in the business of leasing or renting motor vehicles without drivers may be issued an IFTA Fuel Tax licence if an application has been properly filed and approved by the lessor’s base jurisdiction.
    
    
17. Where a lessor is regularly engaged in the business of leasing or renting vehicles without drivers:

a) For short term/trip leases of 29 days or less, the lessor will report and pay the fuel tax unless the following conditions are met:

(i) there is a written lease or rental contract designating the lessee as the party responsible for reporting and paying the fuel tax; and

(ii) the lessor has a copy of the lessee’s IFTA fuel tax license, which is valid for the term of the lease/rental.

b) Where the lease/rental period exceeds 29 days, the lessee and lessor may designate which party will report and pay the fuel tax.

18. Where the lessor is an independent contractor:

    a) for short term/trip leases of 29 days or less, the lessor will report and pay the fuel tax.

    b) for leases exceeding 29 days, the lessee and lessor have the option of designating which party will report and pay the fuel tax. Where there is no written lease or where the lease is silent, the lessee will be responsible for reporting and paying the fuel tax. If the lessee is responsible for reporting and paying fuel tax, the base jurisdiction will be the base jurisdiction of the lessee, regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes.

19. If the lessee is a household goods carrier, the party liable for reporting and paying fuel tax will be:

    a) the lessee, if the qualified motor vehicle is being operated under the lessee’s jurisdictional operating authority, or

    b) the lessor, if the qualified motor vehicle is being operated under the lessor’s jurisdictional operating authority.

    In either case, the base jurisdiction of the vehicle will be the base jurisdiction of the party liable for reporting and paying the fuel tax regardless of the jurisdiction in which the vehicle is registered for vehicle registration purposes.

20. TRA does not require the filing of lease agreements, but such lease agreements must be made available upon request.

Reporting and Remittance Requirements

21. An Alberta IFTA licensee must submit to TRA the Alberta IFTA Fuel Tax Return (AT2059) and remittance, by the last day of the month following a quarterly reporting period. If the due date falls on a weekend or a government holiday, the return and remittance must be submitted the next business day. The due dates are as follows:

22. Taxes may be remitted by any of the following methods:

    a) mailed, delivered by courier or hand-delivered to TRA. Remittances should be made payable to the Minister of Finance and accompanied by a Remittance Advice. Hand-delivered payments should be taken to one of the Alberta Finance offices, between the hours of 8:15 a.m. and 4:30 p.m., Monday to Friday, except government holidays;

    b) at most financial institutions in Canada, if accompanied by a Remittance Advice;

    c) by wire transfer. For more information on this option, contact TRA at (780) 427-3044 or 310-0000 / (780) 427-3044 (Alberta toll free); or

    d) through internet payment services provided by major financial institutions in Canada. For further details on this option, contact your financial institution or call TRA at the above number.
    

23. The return and remittance are considered received and filed on the date stamped on the envelope by the U.S. Postal Service, Canada Post or the national postal service of the United Mexican States, or the date they were mailed with satisfactory proof of the date of mailing. Hand-delivered returns or remittances shall be considered filed on the date they were delivered to TRA.
    
    
24. A return must be submitted for each quarter, even if the licensee did not travel in IFTA jurisdictions during the reporting period or the distance travelled in IFTA jurisdictions was reported by another licensee (e.g., under a lease/contract arrangement). A licensee who does not travel outside of Alberta during the reporting period must file a return indicating the distance travelled and fuel purchased in Alberta. If a licensee submits a "nil" return, it should be indicated on the return that either the licensee did not travel in IFTA jurisdictions, or the distance travelled was reported by another licensee (include name of the other licensee).
    
    
25. A written request for special permission is required if a licensee wants to submit the tax return and remittance on an annual basis. Permission may be granted if the licensee’s IFTA vehicles travel less than 8,000 kilometres per year (based on previous filing history) in all member jurisdictions excluding Alberta, and no objection is received from other member jurisdictions. The annual tax return is due on the last day of the month immediately following the close of the annual period.
    
    
26. Failure to file the Alberta IFTA Fuel Tax Return and remit taxes due may result in the revocation of an Alberta IFTA licensee’s credentials. Enforcement agencies in all IFTA jurisdictions would then be advised of the licensee’s changed status.