IFTA 101 IFTA Managers and Law Enforcement Workshop

IFTA 101 IFTA Managers and Law Enforcement Workshop Presented by Kate Kennedy (Indiana) IFTA 101 - 2014

In the beginning we created roads and the roads were happy but they were lonely. IFTA 101 - 2014

So we created trucks to run on the roads. IFTA 101 - 2014

But the trucks started breaking down the roads so we collected taxes to maintain and repair the roads. IFTA 101 - 2014

To make sure every jurisdiction (state or province) got their fair share, IFTA was created. IFTA 101 - 2014

THE DARK DAYS IFTA 101 - 2014

The Dark Days Before IFTA, carriers traveling inter-jurisdictionally had to: – Get a decal from each jurisdiction – File a return with each jurisdiction where they traveled – Pay a fuel tax to each jurisdiction, if required – Wait for reimbursement from each jurisdiction, if any – Keep records for each jurisdiction for audit purposes IFTA 101 - 2014

The Dark Days Before IFTA, each jurisdiction had to: – Register and issue decals to each requesting carrier – Receive returns from carriers located everywhere – Issue reimbursements to carriers everywhere, when requested – Wait for the payments from carriers everywhere IFTA 101 - 2014

The Dark Days The jurisdiction had no control over: – What taxes they received – Fuel export and import – Audits in different jurisdictions IFTA 101 - 2014

A NEW WORLD…. . So, What is IFTA? INTERNATIONAL FUEL TAX AGREEMENT It is a tax collection agreement by the 48 contiguous American states and 10 Canadian provinces. It is known as “the Agreement. ” IFTA 101 - 2014

A NEW WORLD…. . It is the purpose of “the Agreement” to promote and encourage the fullest and most efficient possible use of the highway system by making uniform the administration of motor fuels use taxation laws with respect to motor vehicles operated in multiple member jurisdictions. (R 130) IFTA 101 - 2014

So, What is IFTA? . 100 To effect this purpose, the Agreement implements three core provisions: . 005 The base jurisdiction concept. 010 Retention of each jurisdiction’s sovereign authority. 015 A uniform definition IFTA 101 - 2014

So, What is IFTA? . 200 To enable participation in this Agreement and to supplement the core provisions, the relationship among the member jurisdictions is further expressed in: . 005 Reciprocal statutes and…. . IFTA 101 - 2014

So, What is IFTA? *R 140 COOPERATIVE ADMINISTRATION …to enable participating jurisdictions to act cooperatively and provide mutual assistance in the administration and collection of motor fuels use taxes. IFTA 101 - 2014

So, What is IFTA? IFTA is governed by the following documents (R 120): 1) the AGREEMENT (Article R) 2) the PROCEDURES MANUAL (Article P) 3) the AUDIT MANUAL (Article A) IFTA 101 - 2014

Through IFTA, Carriers…. • Have one license and one set of decals for each qualified motor vehicle. • File one tax return for each quarter with their base jurisdiction • Make one tax payment or receive one refund. • Base jurisdiction audits for all IFTA 101 - 2014

Through IFTA, Carriers…. • Renew license and decals • File a quarterly (or annual) tax return and pay all taxes due • Recordkeeping Requirements: - maintain detailed distance records and fuel purchases - maintain supporting documentation - make documents available for an audit IFTA 101 - 2014

Through IFTA, Member Jurisdictions… - Have fewer carriers to administer - Audit carriers from their own jurisdiction only - Have reduced administrative costs - Increase - Audit coverage - Enforcement - Collect motor fuel taxes IFTA 101 - 2014

Through IFTA, Member Jurisdictions… • Abide by the Governing Documents • Pay membership dues (R 1810. 300) • Vote on amendments (R 1650. 100) • Update tax rates quarterly (P 1120) • Participate in Program Compliance Reviews (P 1200) IFTA 101 - 2014

Through IFTA, Member Jurisdictions… • Conduct reviews on member jurisdictions (P 1200) • Adhere to Audit requirements (R 1310 and A 310) • Distribute the fuel tax in a timely manner (P 1040) • Maintain fuel tax records for licensees (P 900) • Complete an Annual Report IFTA 101 - 2014

Through IFTA, Member Jurisdictions… • Update the communication lists and the exemption database • Participate on committees and attend IFTA meetings IFTA 101 - 2014

DEFINITIONS • Jurisdiction (R 227) - a state of the United States and the District of Columbia - a province or territory of Canada • Base Jurisdiction (R 212) - where qualified motor vehicles are based for vehicle registration purposes and where operational control and records are maintained or can be made available. IFTA 101 - 2014

DEFINITIONS • Licensee (R 236) a person who holds an un-cancelled Agreement license issued by the base jurisdiction. • Qualified Motor Vehicle (R 245) a motor vehicle used, designed, or maintained for transportation of persons or property and…… IFTA 101 - 2014

DEFINITIONS • Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26, 000 pounds or 11, 797 kilograms; or • Having three or more axles regardless of weight; or • Is used in combination, when the weight of such combination exceeds 26, 000 pounds or 11, 797 kilograms gross vehicle or registered gross vehicle weight. Qualified Motor Vehicles do not include recreational vehicles. IFTA 101 - 2014

So, what is IFTA, Inc. ? INTERNATIONAL FUEL TAX ASSOCIATION, INC. (R 1800) Through the IFTA Agreement, member jurisdictions act cooperatively to administer and collect motor fuel use taxes based on the consumption of motor fuel in qualified motor vehicles. IFTA 101 - 2014

So, what is IFTA, Inc. ? • Is a non-profit association incorporated in Arizona. • Is funded by annual membership dues (July 1 June 30) • Has a Board of Trustees elected by the Membership and governed under bylaws. • Established to administer the Agreement. IFTA 101 - 2014

So, what is IFTA, Inc. ? • Oversees Agreement committees • Entry into the Agreement constitutes membership in the Association. IFTA 101 - 2014

What does IFTA, Inc. do? v Administer the ballot process and the IFTA governing documents v Gather and distribute jurisdictional quarterly tax rates v Provide technical assistance to the member jurisdictions and licensees v Gather and distribute jurisdictional annual reports IFTA 101 - 2014

What does IFTA, Inc. do? v Lead and participate in compliance reviews v Maintain the IFTA, Inc. website v Plan and prepare meetings v Administer the Clearinghouse and Funds Netting IFTA 101 - 2014

IFTA, INC. STANDING COMMITTEES Agreement Procedures Committee – responsible for the review and maintenance of the IFTA Procedures Manual and Articles of Agreement. Industry Advisory Committee – advises and assists both the Agreement Procedures Committee and the Audit Committee. IFTA 101 - 2014

IFTA, INC. STANDING COMMITTEES Program Compliance Review Committee – ensures the Agreement is administered adequately and consistently from jurisdiction to jurisdiction. Dispute Resolution Committee – hears disputes filed pursuant to Section R 1555. Members of the Committee will be selected pursuant to the Committee Charter and will perform the functions as outlined in the Dispute Resolution Process. IFTA 101 - 2014

IFTA, INC. STANDING COMMITTEES Law Enforcement Committee – advises the IFTA Membership concerning enforcement matters through reports to the IFTA, Inc. Board of Trustees. Committee members will be representatives of law enforcement agencies of member jurisdictions having the responsibility to enforce laws affecting motor carriers, including IFTA. Issues will be assigned to the Law Enforcement Committee by the Board. IFTA 101 - 2014

IFTA, INC. STANDING COMMITTEES Clearinghouse Advisory Committee – advises the Board and the Executive Director of IFTA, Inc. of business rules for the operation of the Clearinghouse, ensuring the Clearinghouse operates within the IFTA requirements, suggesting enhancements to the Clearinghouse, proposing ballots and serving as a technical resource for membership. IFTA 101 - 2014

IFTA, INC. STANDING COMMITTEES Information Technology Advisory Committee – advises the Board and the Executive Director of IFTA, Inc. of proposed IT solutions that will improve the administration of the IFTA. Audit Committee – responsible for the review and maintenance of the IFTA Audit Manual. IFTA 101 - 2014

IFTA, INC. SPECIAL COMMITTEES Attorneys' Section Steering Committee – provides training for IFTA jurisdictions to become familiar with their responsibilities in administering the IFTA program, facilitate cooperation between the member jurisdictions and review ballot proposals on behalf of the member jurisdictions. IFTA 101 - 2014

IFTA, INC. SPECIAL COMMITTEES Dual Fuel Working Group – explores the use and reporting of dual fuel vehicles in IFTA jurisdictions. IFTA Compliance Audit Working Group – tasked with studying the current audit requirements and updating the processes and language in the governing documents. IFTA 101 - 2014

IFTA, INC. SPECIAL COMMITTEES Electronic Credentials Working Group – identifies, researches, analyzes and documents the issues surrounding the administration, issuance, and enforcement of an electronic credential that could ultimately replace both the IFTA license and decal. IFTA 101 - 2014

IFTA, INC. STAFF Lonette L. Turner CEO/CFO Debora K. Meise Senior Director Amanda Koeller Program Administrator Jason De. Graf Information Services Director Tom King Webmaster Tammy Trinker Office and Events Administrator IFTA 101 - 2014

IFTA, INC. STAFF Richard O. Beckner Program Compliance Administrator Patricia Platt Program Compliance Administrator IFTA, Inc. 912 W. Chandler Blvd. #B-7 Chandler, AZ 85225 Telephone: (480) 839 -IFTA (4382) Fax: (480) 839 -8821 Website: www. iftach. org IFTA 101 - 2014

IFTA Clearinghouse What the heck is it? ? A database where jurisdictions upload data that can be viewed and retrieved by participating member jurisdictions (R 2100). IFTA 101 - 2014

IFTA Clearinghouse What kind of information is stored in the Clearinghouse? - Demographic Data - Transmittal Data (IFTA, Inc. advises each jurisdiction of the amount due to or from other jurisdictions for the purpose of funds netting). - Inter-jurisdictional Audit reports - Decal numbers IFTA 101 - 2014

What is Funds Netting? Ø Funds Netting means the sum of each Participating Member’s monthly transmittal total due amount to and from every other Participating Member resulting in the net amount owed or to be received for each Participating Member. IFTA 101 - 2014

What is Funds Netting? Basic Steps in Funds Netting: 1. Jurisdictions upload their data to the Clearinghouse. 2. IFTA, Inc. produces funds netting reports (summary netting and final settlement reports) and sends to jurisdictions. 3. Jurisdictions send payment to Clearinghouse account. IFTA 101 - 2014

What is Funds Netting? Basic Steps in Funds Netting (Cont’d): 4. IFTA, Inc. distributes funds to the jurisdictions “designated to receive funds” in the Final Settlement Report. IFTA 101 - 2014

How is IFTA enforced? Between the jurisdictions: - upload to Clearinghouse revoked and reinstated licenses - upload to Clearinghouse new and closed accounts - audit an average of 3% of renewed licenses annually - Program Compliance Review - Dispute Resolution IFTA 101 - 2014

How is IFTA enforced? On the road: Law Enforcement Officers (LEOs) - look for decals - verify carrier has a copy of license * if none of the above, LEOs ask for the trip permit - verify status of license - verify fuel ** may issue citations, impose fines or impound for non-compliance IFTA 101 - 2014

OCE T PR 14 - 20 101 SS ent, MEN eem e END Agr ay b AM f the al m nt o anu IFTA dme dit M men r A u for a al, o anu sals ropo res M 0) u 160 ced Pro e by: (R mad IFTA

T MEN END S CES PRO s AM ure IFTA ced : Pro tees y mit ment isor Com gree Adv A FTA or it use ent gho Aud nce arin cem r o f plia Cle n E om Law m. C gra Pro n tees ctio rus isdi of T Jur ard ber * Bo y Mem 14 * An - 20 101 IFTA

OVERVIEW OF BALLOT PROPOSALS 1) Submit Proposal for a Full Track or Short Track Cycle 2) Open meeting discussion by the jurisdictional membership 3) Discussion by commissioners 4) Revision of amendments based on comments 5) Amendments accepted or withdrawn IFTA 101 - 2014

How Full Track Ballot Proposals Work Full Track proposals that are not voted on at the open meeting or do not receive three fourths affirmative vote may still proceed as follows (R 1630): 1) Within 45 days of the open meeting, the sponsoring jurisdiction or committee must submit its proposal to the repository for circulation as a preliminary ballot proposal (. 100). 2) The repository will circulate the preliminary ballot proposal to the member jurisdictions and the standing committees of the Association for a 45 day comment period (. 200). IFTA 101 - 2014

How Full Track Ballot Proposals Work 3) At the end of the 45 -day comment period, the preliminary ballot proposal is submitted to the repository as a final ballot proposal and circulated, together with all comments received, to the member jurisdictions. Jurisdictions have 60 days in which to vote on final ballot proposals submitted under this section (. 300). IFTA 101 - 2014

How Short Track Ballot Proposals Work Proposals that receive the required three-fourths vote at the open meeting of the commissioners may proceed as follows (R 1625): 1) Within 30 days of the open meeting, the sponsoring jurisdiction or committee must submit its proposal to the repository for circulation as a preliminary ballot proposal (. 100). IFTA 101 - 2014

How Short Track Ballot Proposals Work 2) The repository will circulate the preliminary ballot proposal to the member jurisdictions and the standing committees of the Association for a 30 -day comment period (. 200 ). 3) At the end of the 30 -day comment period, the preliminary ballot proposal is submitted to the repository as a final ballot proposal and circulated, together with all comments received, to the member jurisdictions. Jurisdictions have 30 days in which to vote on final ballot proposals submitted under this section (. 300). IFTA 101 - 2014

QUESTIONS? IFTA 101 - 2014

THANK YOU FOR YOUR TIME AND ATTENTION Kate Kennedy Indiana Department of Revenue kkennedy 2@dor. in. gov 317 -615 -7274 IFTA 101 - 2014