CLIENT ASSISTANCE TEAM
Attention, Michigan motor carriers: Effective Jan. 1, 2015, IFTA now is paperless. It's a new year, and licensing and tax returns for an International Fuel Tax Agreement license now are handled exclusively online.
Failure to comply with the updated process could result in lost IFTA credentials and financial penalties. The following is a lightning-fast Q&A for Michigan motor carriers that answers the top four (and a half, for good measure!) questions you might have about on the change:
1.) Who is affected by this change?
Motor carriers with their IFTA based out of Michigan have been affected by this process change.
An interstate motor carrier operating qualified motor vehicles between at least two member jurisdictions (that's the 48 contiguous U.S. states and 10 Canadian provinces) is required to have an International Fuel Tax Agreement license and stickers.
According to the IFTA, a qualified motor vehicle is used, designed, or maintained for transportation of people and property and:
- Has two axles and a gross vehicle weight greater than 26,000 pounds
- Has three or more axles regardless of weight
- Is used in combination, when the weight of the combo is greater than 26,000 pounds
Farm vehicles and buses that meet these standards do need an IFTA license. Recreational vehicles are not qualified motor vehicles.
2.) How do I complete an IFTA return?
In 2015, according to Michigan's new rules, paper tax returns for IFTA filings will not be accepted, and returns are due quarterly on April 30, July 31, Oct. 31, and Jan. 31 of each year.
This means that the return for Q4 2014 (October, November, and December 2014) must be filed electronically no later than Jan. 31. Motor carriers must use Michigan's IFTA IPC system to file this record electronically.
This system is your one-stop shop for all things IFTA -- you can use it to order an IFTA license and decals, renew an IFTA license, and communicate with the Michigan Treasury Department, in addition to filing IFTA tax returns and making IFTA payments.
3.) What happens if I'm not compliant?
The worst case scenario for those that don't file quarterly tax returns or pay quarterly taxes losing your IFTA credentials.
Per the IFTA Articles of Agreement, there's a late payment penalty of $50 or 10 percent of the IFTA tax due, whichever is greater. The Articles of Agreement also establish interest to be charged. Michigan's Revenue Act also calls for a failure-to-pay penalty that's determined by "Notices of Intent To Assess." The IFTA FAQ on reporting explains the different penalties.
The bottom line: Punting on the Michigan motor carrier tax could get expensive!
4 (and a half).) What if I have more questions? Where can I find further updates?
Touch base with the Michigan ITFA office. The phone number is 517-636-4580; the email is IFTA_Licensing@michigan.gov; the fax is 517-636-4593.
You also can mail the IFTA experts:
Michigan Department of Treasury
Special Taxes Division, IFTA Unit
P.O. Box 30474
Lansing, MI 48909-7974
Michigan's state government also offers a robust FAQ on IFTA. Click here to read IFTA/Motor Carrier Frequently Asked Questions. You also can check out the main IFTA page on Michigan.gov's website for a higher-level view of the tax.
Please note: While Michigan has moved to a paperless IFTA filing system, it's best practice to check with your state for any process updates.
What other questions do you have about this change to the Michigan motor carrier tax? What's your secret to staying on top of updates rules? Please share in comments!
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