International Fuel Tax Agreement (IFTA)
Primary Contact: Kim Jenkins, Branch Manager
 
The International Fuel Tax Agreement (IFTA) is an agreement among the United States and Canadian provinces to simplify the reporting of fuel used by Interstate/Inter-jurisdictional motor carriers. Upon application, the carrier's base jurisdiction will issue credentials, which will allow the IFTA license to travel in all IFTA member jurisdictions.
 
Additional information may be obtained from International Fuel Tax Association, Inc.
 
Record Retention Requirements
  1. Each taxpayer shall maintain a complete record of all motor fuel purchased, received, or used in the conduct of its business. The fuel records shall contain at least the following information:
    1. The date of each receipt of fuel
    2. The name and address of the person from whom purchased or received
    3. The name of the purchaser of the fuel
    4. The number of gallons of fuel received
    5. The type of fuel
    6. The vehicle or equipment into which the fuel was placed and
    7. If applicable, complete records on power takeoff use of motor fuel
  2. Each taxpayer shall maintain detailed distance records that show operations on an individual-vehicle basis. The distance records for each qualified motor vehicle shall contain at least the following information:
    1. Both taxable and nontaxable usage of fuel
    2. Distance traveled for taxable and nontaxable use and
    3. Beginning and ending date of each trip
    4. Trip origination and destination
    5. Route traveled on trip
    6. Trip beginning and ending odometer readings
    7. Total mileage of each trip and
    8. Distance recaps for each qualified motor vehicle for each jurisdiction in which the qualified motor vehicle is operated.
  3. In order for a taxpayer to obtain credit for a tax-paid fuel purchase a receipt or invoice, a credit card receipt or automated vendor-generated invoice or transaction listing shall be maintained by the taxpayer. An acceptable receipt or invoice for tax-paid fuel purchased shall not have been altered or indicate erasures and shall contain at least the following information:
    1. The date of purchase of fuel
    2. The name and address of the person from whom purchased
    3. The number of gallons purchased
    4. The type of fuel
    5. The price per gallon of the fuel purchased or the total amount of the sale
    6. Unit number of the motor vehicle into which the motor fuel was placed and
    7. Purchaser's name. (In the case of a lease agreement, receipts are acceptable in either name, provided the records firmly indicate the legal connection to the reporting party.)
  4. A taxpayer shall not apply for credit for withdrawal from licensee-owned, tax-paid bulk fuel storage unless the following detailed records are kept:
    1. Date of withdrawal
    2. Number of gallons withdrawn
    3. Fuel type
    4. Unit number of the motor vehicle or equipment into which the fuel was placed and
    5. Purchase and quarterly beginning and ending inventory records to substantiate that tax was paid on the bulk purchase.
    1. A taxpayer shall account separately for tax-paid fuel purchased as storage or bulk from fuel purchased over the road
    2. The licensee shall retain a copy of each delivery ticket and receipt for storage or bulk fuel
    3. Bulk fuel inventory reconciliation's shall be maintained. Records shall be maintained to distinguish fuel placed in a qualified motor vehicle from other uses
    4. Each tax-paid purchase shall be supported by a receipt, invoice, credit card receipt or automated vendor-generated invoice or transaction listing and
    5. Over-the-road fuel receipts shall identify the vehicle by the registration plate number or unit number, because only a vehicle identified with the fuel tax licensee's operation may be reported or mileage or fuel consumption.
  5. A separate total shall be compiled for each of the following fuel types used by a fuel tax licensee:
    1. Gasoline
    2. Diesel
    3. Kerosene
    4. Gasohol
    5. Liquid petroleum gas
    6. Compressed natural gas and
    7. Other
  6. Each taxpayer shall retain the information required for a period of four (4) years from the date of filing the tax report based on these records, except when a "Consent of Extension of Statutory Limitation of Time for Assessment" has been filed with the Division of Road Fund Audits to extend the four (4) year statutory period limitation.
  7. Each taxpayer subject to a KYU license shall maintain the following records on operations within Kentucky of each motor vehicle that is subject to the tax imposed by KRS 138.660(3):
    1. Type of motor vehicle
    2. Declared gross weight of the motor vehicle
    3. Weigh bills showing the actual weight of the loaded motor vehicle
    4. Mileage operated by unit number in Kentucky as reported on trip sheets and driver logs that shall include the following:
      1. Beginning and ending odometer readings of each trip
      2. Each route driven
      3. Beginning and ending date of each trip
      4. Trip origin and destination
      5. Total trip miles
    5. Bills of lading and
    6. Off-highway mileage which includes periodical logs showing entering and leaving of public highways and
    7. Manual or computer-generated mileage recaps for Kentucky.
    1. Each taxpayer subject to a KYU license shall retain the information required for a period of five (5) years from the date of filing the tax report based on these records, except when a "Consent of Extension of Statutory Limitation of Time for Assessment" has been filed for the Division of Road Fund Audits to extend the five (5) year statutory period limitation.
    2. If the records required to be maintained are insufficient, incomplete, or unavailable for the auditor to complete an audit, the auditor may examine any other records of the taxpayer which might assist in establishing the tax liability of the taxpayer.
  8. Both the lessor and lessee involved in the short or long-term lease of motor vehicles shall maintain sufficient records, including copies of the leases and any supplemental agreements, to allow determination at any time of the entity responsible for reporting or payment of the taxes.
  9. Records may be retained on microfilm, microfiche, or other computerized or condensed record storage system if the system has been pre approved by the Transportation Cabinet's Division of Road Fund Audits.
  10. If a taxpayer chooses to use an on-board electronic data recording system in lieu of or in addition to trip reports for tax reporting, the devices, record keeping, data collection, reporting and taxpayer responsibility shall comply with Section P600 of the IFTA Procedures Manual.
    1. A taxpayer subject to an IFTA or KIT license who operates exclusively in intrastate commerce and for which all of the mileage traveled is taxable may choose to maintain quarterly odometer readings on an individual motor vehicle basis rather than the more detailed records.
    2. A taxpayer subject to a KYU license who operates exclusively in intrastate commerce and for which all of the mileage traveled is taxable may choose to maintain quarterly odometer readings on an individual motor vehicle basis rather than the more detailed records.
  11. A taxpayer subject to an IFTA or a KIT license applying for a refund pursuant to Section 11 of 601 KAR 1:200 shall, in addition to the other requirements, maintain the following records:
    1. Proof of power-take-off exemption percentage including how the percentage was calculated
    2. Listing of bulk fuel storage which includes:
      1. Location of bulk fuel storage
      2. Capacity of bulk fuel storage and
      3. Whether tanks are designated for "on" or "non" highway use
    3. Kentucky Revenue Cabinet Motor Fuels Tax Refund Permit Number and Kentucky. Revenue Cabinet Sales and Use Tax Number, if applicable;
    4. Equipment listing for each motor vehicle on which the refund is being requested including:
      1. Vehicle type
      2. Use of power-take-off
      3. Vehicle unit number
      4. Vehicle identification number and
      5. Type of fuel used in each vehicle

Downloadable documents
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Contact
 
Office of Audits
200 Mero Street, 4th floor
Frankfort, Kentucky 40622
Toll Free: 1 (800) 928-6760
Phone: (502) 564-6760
Fax: (502) 564-6766
Hours: 8am - 4:30pm EST, M-F

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