How Mexican
Carriers Can
Participate in
IRP and IFTA
Module 1: Registration under International
Registration Plan (IRP)
Module 2: Fuel Taxation under International
Fuel Tax Agreement (IFTA)
Goal
Learn how to comply with
registration requirements
under IRP and fuel taxation
under IFTA for operations
throughout the US and
Canada
What Are IRP and IFTA?
International
Registration Plan (IRP)
International Fuel
Tax Agreement (IFTA)
One-Stop Registration
– One base jurisdiction
to file application and pay
fees
– One jurisdiction oversees
registrant
The jurisdiction you select to
register your vehicles
California, Arizona, New
Mexico or Texas, in
whichever you expect to
travel the most miles in your
first year of operation in the
US
The same jurisdiction for
both IRP and IFTA
You!
For-hire motor carrier
Private motor carrier
– One set of credentials
Household goods
carrier
Owner-operator
Leasing company
Fuel Tax Collection Process
– Licensee pays tax on each gallon
purchased
You!
For-hire motor
carrier
Private motor carrier
Household goods
carrier
Owner-operator
Leasing company
– Licensee summarizes purchases and
distances traveled each calendar
quarter
– Licensee files tax return that calculates
tax due to each jurisdiction
– Base jurisdiction provides IFTA license
and redistributes tax paid in one
state/province to compensate use of
highways in each state/province in
which you operate
The document you
file quarterly with
your base
jurisdiction
calculating any tax
payment due or
refund owed you
Issued to a
licensee upon
opening an
account, and for
each renewal
year beginning
January 1
Original kept in
office, copy kept
in cab of each
IFTA vehicle
IRP-IFTA Similarities
– Similar types of vehicles
operated
– Similar recordkeeping
requirements
– Audit and enforcement practices
But…
IRP and IFTA Are Separate and
Distinct Programs
• IRP
• IFTA
– Vehicle
registration
– Fuel use
taxation
– Pay fees
annually in
advance of
operation
– Pay tax upon
purchase of
fuel and then
adjust by
jurisdiction on
quarterly tax
return
IRP Prerequisites
• USDOT OP-1 (MX) operating
authority
• Heavy duty trucks, passenger
buses, and/or tractor-trailer
combinations
• Intention to operate in at least 2 IRP
jurisdictions
Before You License in IFTA
• Have USDOT OP-1(MX)
operating authority
• Have vehicle types authorized
for IFTA
• Have vehicles registered
under IRP
Cabotage Limitation
• US federal limitations placed on you as
a motor carrier, your drivers, and your
vehicles as to operations in the US
• US federal rules limit your travel to
delivery between a point in Mexico and
a point in US
– Prohibited: Pick up a load in the US for
delivery to another point in the US
Quick Quiz
• What types of fees are
collected under IRP?
• What types of taxes are
collected under IFTA?
• Which state must I use as my
base jurisdiction?
• Can I pick up from and deliver
to two US locations in the trip?
Your Responsibilities As
an IRP Registrant
• Filing application and renewal
forms
• Maintaining records accurately
and completely
• Paying fees
• Displaying license plates, cab
cards
Your Responsibilities as an IFTA
Licensee
• Filing application and renewal
• Maintaining records
• Filing tax returns and payment
of taxes due
• Displaying IFTA license and
decals
Creating a Compliant
Recordkeeping System
• Driver trip logs
• Fuel receipts
• In-house trip log summaries
Recordkeeping for compliance
The keys to calculating fees and
taxes for payment for travel in
IRP/IFTA jurisdictions and staying
in compliance
When you operate under IRP and
IFTA, you agree to retain records
and make them available upon
request.
Records Kept for IRP
Maintenance of
distance
records begins
at the time
license plates
and cab cards
are provided
by the
jurisdiction
• Record ALL distance traveled
• Record loaded and empty
distance
• Record whether on company
or personal travel in
apportionable vehicle
• Record travel in Mexico, each
US state, each Canadian
province
2-axle trucks/buses
greater than 26,000
lbs. GVW
Trucks/buses with 3
or more axles,
regardless of
weight
Tractor-trailer
combinations
greater than 26,000
lbs. GVW
Used or intended
for use in 2 or more
IRP jurisdictions
Must Log All Trips
Date of trip (starting / ending)
Trip origin and destination (with city & jurisdiction)
Route of travel
Beginning and ending odometer or hub odometer
reading of the trip
Total trip distance traveled
Distance traveled by jurisdiction
Unit Number or VIN
At the discretion of the base jurisdiction, may also
require vehicle fleet number, registrant’s name,
trailer number, and drivers name/signature
Summaries/Recaps to Generate
Monthly, quarterly, and annual
summary documents of distance
generated by vehicle and jurisdiction
Records Kept for IFTA
• Distance records same as IRP
– Document:
• All distance traveled
• All distance loaded and empty
• All distance whether on company or
personal travel
• All distance in Mexico, Canada, US
• All distance from the time IFTA license
and decals are put in the vehicle
Must Log All Trips
• Document:
–
–
–
–
–
–
–
–
Start/end dates of each trip
Trip origin/destination (city/jurisdiction)
Route of travel (highways traveled on)
Beginning/ending
odometer/hubometer reading
Total trip distance
Distance traveled by jurisdiction
Units/VINs
Fuel purchases
Fuel Records Kept
• Document:
– All fuel purchased, received,
and used by IFTA qualified
vehicles
– All fuel purchased and distance
traveled by IFTA jurisdiction
and in Mexico
– Each fuel type separately for
each IFTA vehicle
Same as IRP
apportionable vehicles
2-axle trucks/buses
greater than 26,000 lbs.
GVW
Trucks/buses with 3 or
more axles, regardless
of weight
Tractor-trailer
combinations greater
than 26,000 lbs. GVW
Used in 2 or more IFTA
jurisdictions
Fuel Purchase Evidence
• Retail fuel purchases supported by
a receipt, invoice, credit card
receipt, or automated vendor
generated invoice or transaction
listing. Only purchases in US and
Canada are eligible for tax
computation purposes; purchases
in Mexico are not to be included in
tax computation
Acceptable Records –
Retail Purchase
• Acceptable receipt or invoice
must contain:
•
•
•
•
•
Date of purchase
Name and address of the seller
Number of gallons or liters
Type of fuel purchased
Price paid per gallon or liter or total
amount of sale
• Vehicle plate, unit, or identification
number into which the fuel was delivered
• Absence of info = invalid receipt
/ invoice for tax computation
Fuel Records Kept –
Bulk Storage
• Document:
– Record of bulk fuel receipts or
purchases, withdrawals, and
inventories for each bulk fuel
storage location
– Details of purchase and inventory
records that show tax paid to an
IFTA member jurisdiction receive
credit on tax return
• Absence of info = invalid
withdrawal/purchase for IFTA
calculation
Acceptable Records –
Bulk Storage
• Acceptable receipt or
invoice must contain:
•
•
•
•
•
•
Date of purchase
Name and address of seller
Number of gallons purchased
Type of fuel purchased
Purchase price with tax included
IFTA member jurisdiction in US/CN
• Absence of info = invalid receipt /
invoice for tax computation
Acceptable Records Bulk Storage
• Distribution record must document all
withdrawals from each bulk storage tank location.
• Acceptable distribution record must contain:
•
•
•
•
Date of withdrawal
Number of gallons or liters withdrawn
Type of fuel
Vehicle plate, unit, or other identification
number into which the fuel is delivered
• Withdrawals for other purposes than use in
IFTA qualified vehicles
• Inventory records
IFTA Summaries/Recaps
To Generate
Quarterly summaries
For distance records (like IRP
requirement)
– By individual IFTA vehicle
– By jurisdiction
For fuel records
– For each fuel type
– For each IFTA vehicle
– For each jurisdiction
Internal records may
be kept in kilometers
and liters
Forms submitted for
US operation MUST
BE in US
measurements of
miles and gallons
Quick Quiz
• Name 3 items required on a trip log
• If I paid fuel tax on the purchase,
what evidence do I need on the
receipt to prove that?
• I crossed through three states to
make my delivery into the fourth
and didn’t need to buy fuel until my
return. Do I owe tax to the three
states I simply traveled through?
Before Beginning Operations
(New IRP Account)
The initial process of
establishing an
account and the
subsequent annual
process of renewing
registration of a fleet
of apportioned/
apportionable
vehicles under IRP
• Identify base jurisdiction for
registration
• Apply for apportioned fleet
registration on Schedules
A/B
• Estimate operations
One or more
apportioned or
apportionable
vehicles
– Use self-constructed business
plan OR estimated distance
chart available from base
jurisdiction
• Receive and pay invoice for
apportioned fleet
registration fees
Before Beginning Operations
(New IRP Account)
• Receive and display license
plate and cab card
• Create and implement
recordkeeping system
– Track trips including
• Dates of trip
• Miles traveled by vehicle
• Cumulative miles traveled in
each jurisdiction, including
Mexico
After the Close of Each Month
• Regardless of extent of
operations (little or even none
in that month)
– Receive driver trip logs
– Consolidate miles by vehicle
– Summarize activity of miles by
jurisdiction (called a “monthly
recap”)
After the Close of Each
Calendar Quarter
• Consolidate monthly recaps
into quarterly summary (called
a “quarterly recap”)
Month 11-12 Of Your IRP
Apportioned Fleet Registration Year
• Receive renewal application
forms from base jurisdiction
• Apply for renewal apportioned
fleet registration
• Document actual miles on
application
Each Year Of IRP Apportioned
Fleet Registration
• Repeat monthly and quarterly
recordkeeping processes
• Repeat renewal application
process
• Repeat payment process
• Repeat exchange of license
plates, cab cards for new
The IRP Main Application Forms
• Schedule A
– Annual original application and weight
schedule
• Schedule B
– Annual declaration of intent to travel into
IRP jurisdictions and expected distance in
each jurisdiction (IRP and non-IRP) in miles
• Schedule C
– For changes during the year
– For vehicle information and weights
Proofs Required With IRP
Application Forms
• IRS Form 2290 – Federal Heavy Vehicle
Use Tax (required for gross weight of
55,000 lbs. or more)
• Minimum jurisdiction liability insurance
• Other documents as required by the base
jurisdiction
Application Content
•
•
•
•
•
•
•
•
•
•
Company name and address
USDOT number
Vehicle owner
Gross vehicle weight, unladen weight, make,
model of each vehicle in fleet
Unit number of each vehicle in IRP fleet
Age of each vehicle in IRP fleet
Purchase price, factory price, and date of
purchase of each vehicle in IRP fleet
Number of axles/seats of each vehicle in IRP
fleet
Vehicle fuel type for each vehicle in IRP fleet
VINs
Calculating Your IRP Fees
• Base jurisdiction will send you a
statement of fees owed
• Base jurisdiction calculates fees
based on Schedule A/B entries
you provide
Calculating Your IRP Fees
• Distance in each jurisdiction
traveled
– Divided by total distance in
US/Canadian jurisdictions
(excluding distance generated in
Mexico)
– Percentage derived above applied
to fee required by each jurisdiction
for the weight of the vehicle being
registered
Exercise – Fee Calculation
Scenario:
- Tractor-semitrailer combination
operated in Texas, New Mexico, and
Oklahoma for 12 months.
- Total distance for all three
jurisdictions is 750 miles.
- The registered gross weight for all
three jurisdictions is 80,000 pounds.
Jurisdiction
Texas
New Mexico
Oklahoma
Total
Distance
6,670
1,330
2,000
10,000
% of Total
12-month Fee
per Jurisdiction
$817.00
$172.00
$948.00
IRP Fee for
EACH Vehicle
Fee Calculation Results
The total fee for each vehicle’s
IRP registration is determined
by the percentage of distance
traveled in each IRP jurisdiction
and each jurisdiction’s fee
schedule.
Jurisdiction
Texas
New Mexico
Oklahoma
Total
Distance
6,670
1,330
2,000
10,000
% of Total
66.7%
13.3%
20.0%
100%
12-month Fee
per Jurisdiction
$817.00
$172.00
$948.00
IRP Fee for
EACH Vehicle
$544.94
$22.88
$189.60
$757.42
Distance Totals to Use for First
and Subsequent Years
• First year = Estimates of distance
• Construct your own business
plan and create estimates or
• Use distance chart developed by
base jurisdiction
• Second year = Distance based on
your records of actual distance
traveled
• All registrants use July 1 – June 30
period preceding their registration year
Need to Make a Change During
the Registration Year?
• Can be done, but must notify
base jurisdiction
– Schedule C
• Provide base with information
on change – added vehicles,
removed vehicles, added
states or provinces you expect
to travel
Need to Make a Change During
the Registration Year?
• Estimate added operations for
new vehicles added, new
states/provinces added
• Receive and pay invoice
• Receive and install license
plates, cab cards
• Begin changed operation
Licensee Responsibility –
IFTA Application Filing
• Name of sole owner, all partners, or corporate officers
• “Doing Business As” name
• Mailing and physical location address
• US DOT number
• IRP account number
• FMCSA OP-1 MX number
• Bulk fuel storage locations (if any)
• Jurisdictions in which you will travel
• Number of qualified vehicles traveling in US/Canada
In Addition to Application
• Power of Attorney (optional at
base jurisdiction discretion)
• Surety bond (amount to be
determined)
IFTA Reporting And
Tax Payment Process
• File only the tax return mailed to you by your
base jurisdiction
• File with your base jurisdiction at the address
on the printed return
• File for each calendar quarter one month after
close of quarter
• Attach check for outstanding liability or follow
base jurisdiction instructions for refund
Reporting Liability
• Fuel and travel must be reported
using United States
measurements – gallons & miles
– when filing tax return
Calculating MPG Ratio
• CONVERT FROM KILOMETERS
AND LITERS TO MILES AND
GALLONS
Conversion standards to be used for
IFTA:
1 gallon = 3.785 liters
1 mile = 1.6093 km
1 liter = 0.2642 gallons
1 km = 0.62137 miles
Calculating Liability
Calculate overall
mileage-per-gallon (mpg) ratio
Total distance traveled
(25,000)
By : Total amount of fuel used (6,000)
on the same miles
Get = Average miles per gallon ratio (4.17)
[round to 2 decimal places]
Divide:
Total distance = distance operated in
US/CN/MX, distance operated under trip permits
and temporary IFTA credential for all qualified
motor vehicles (QMV)
Calculating Liability
•
Required on the quarterly tax return and
schedule for each IFTA jurisdiction
–
–
–
–
Total Distance (all distance traveled in the
jurisdiction by every qualified motor vehicle)
Total Taxable Distance (total distance less any
jurisdiction-specific exempt miles)
Taxable Fuel (taxable distance in the jurisdiction
divided by the fleet mpg)
Tax-Paid Fuel (all fuel purchased in the jurisdiction
upon which tax has been paid)
–
–
–
Net Taxable Fuel (taxable fuel minus tax-paid fuel –
this will be a negative number [credit] if taxable fuel is less
than tax-paid fuel)
Tax Rate (the jurisdiction tax rate on the type of fuel
being reported)
Tax Due (net taxable fuel multiplied by the tax rate – if
net taxable fuel is a negative number [credit], tax due will also
be a negative number. )
–
–
Interest Due (interest is due if the tax return is filed
after the due date)
Total Due (tax due plus interest due)
Calculating Liability - Exercise
Calculating Liability - Results
IRP/IFTA Base Jurisdiction to
Audit Its Registrants
•
Ensure proper collection of registration fees
and fuel use taxes owed to all jurisdictions
•
Ensure registrant’s recordkeeping
requirements are met
– You may not be audited for many years but
each year you MUST retain at least the
current year plus 3 preceding years – check
statute of limitations
– Be prepared for follow-up shortly after new
account established
• Jurisdictions may ask you to provide
appropriate source documents to verify
proper recordkeeping procedures
IRP Records Reviewed at Audit
• IRP Schedules A, B, C
• Individual vehicle distance records
• Additional records supporting distance,
including monthly, quarterly, annual
summaries
IFTA Records Reviewed at Audit
• IRP forms and documents
• Fuel tax receipts, statements
• Bulk storage withdrawal
activity
• Additional records supporting
travel, fuel consumption
Record Retention
• For audit purposes, maintain
records for at least four full
years, including the current year
Before and During Audit
• Notice – You are notified in writing of time
period to be audited and the start date for
the audit
• Preparation – You should prepare records
in proper order
• Pre-audit Conference – You should
outline your operations and auditor will
outline the audit procedures
• Examination of your records and reporting
system
• Completion – Auditor completes using
best information available
After the Audit
• Post-audit conference
• Review of the audit by you and
other jurisdictions
• Notification to all parties
concerned
• Payment of any amounts owed
• Audit follow-ups
Audit Results
• You and IRP/IFTA jurisdictions
examine and challenge audit results
• If audit results are not challenged,
the results are final
• Once finalized, base jurisdiction
notifies you of the amount owed plus
interest and penalties, collects the
fees/taxes, and distributes to other
jurisdictions that are due the
fees/taxes
• Refund due? Contact base
jurisdiction for procedures
Problems That Result
In Assessments
• FAILURE to maintain complete and
accurate records
• FAILURE to maintain fuel
receipts/invoices
• FAILURE to pay taxes owed
Problems That Result
in Assessments
• Audits findings that adjust percentages
on the original IRP application with the
result being additional fees/taxes owed
• Distance reported does not agree with
source documents
Enforcement Tools For
Non-compliance
• Highway enforcement
– Credentials checked at roadside,
violations costly
• Other means subject to base
jurisdiction practices
– Administrative suspension
– Revocation
– Reinstatement
IRP and IFTA DO NOT WAIVE…

Requirements for proof of liability
coverage in each member jurisdiction
where required.

Payment of IRS Federal Heavy Vehicle
Use Tax on Form 2290

Weight-Distance Tax payments to those
jurisdictions that impose a WeightDistance Tax: Oregon, New Mexico,
Kentucky and New York.

Requirements for Single State
Registration System (SSRS)

Maximum length, width, height, or axle
limitations

Operating authority from any jurisdiction
in which the vehicle travels
The International Registration Plan
Contact Information In Southern US Border States
Arizona Department of
Transportation
Motor Vehicle Division
PO Box 2100
Phoenix, AZ 85001-2100
Telephone (602) 712-6775
California Department of Motor
Vehicles
International Reg. Plan Unit
PO Box 932320 MS H160
Sacramento, CA 94232-3200
Telephone (916) 657-7971
New Mexico Department of
Taxation and Revenue
Joseph Montoya Building
PO Box 1028
Santa Fe, NM 87504-1028
Telephone (505) 476-1566
Texas Department of
Transportation
Vehicle Titles and Registration
IRP Unit
4000 Jackson Avenue
Austin, TX 78731
Telephone (512) 465-7570
The International Fuel Tax Agreement
Contact Information In Southern US Border States
California State Board of
Equalization
450 N Street
PO Box 942879 MIC: 65
Sacramento, CA 94279-0065
(916) 322-9669
Arizona Department of
Transportation
Mail Drop 527M
Motor Vehicle Division
PO Box 2100
Phoenix, AZ 85001-2100
(602) 712-6775
New Mexico Commercial
Vehicle Bureau
PO Box 5188
Santa Fe, NM 87504-5188
(505) 827-0392
Texas Comptroller of Public
Accounts
111 E. 17th Street
Austin, TX 78774-0100
(512) 463-4600
Other Resources For Help
Manuals with sample forms and
instructions on state agency websites:
www.mvd.azdot.gov/mvd/formsandpubmvd.asp
www.dmv.ca.gov/vehindustry/irp/irpinfo.htm
www.boe.ca.gov/sptaxprog/mciftamain.htm
www.boe.ca.gov/sptaxprog/spftdiesel.htm (MX-CA operations)
www.state.nm.us/tax/forms/comveh/comveh.htm
www.state.nm.us.tax/trd_pubs/IFTAMANUALSPANISH.pdf
www.dot.state.tx.us/services/vehicle_titles_and_registration/apportioned_reg.htm
www.dot.state.tx.us/services/vehicle_titles_and_registration/nafta.htm (MX-TX operations)
www.window.state.tx.us/taxinfo/taxpubs/tx96_336.html
Thank You!