What is IFTA & IRP?
If you are expanding your trucking business across state lines, or just upgraded to a vehicle combination that requires a CDL, you have likely run into two major acronyms: IFTA and IRP.
While they often get grouped together, they serve very different purposes. Mixing them up or ignoring them can lead to expensive fines or prevent you from operating altogether.
Whether you are a brand new carrier, or a company that has been operating for years but just made changes to your equipment, understanding these two requirements is necessary to maintain a compliant and profitable company.
What Is IRP?
The International Registration Plan (IRP) is a reciprocity agreement between the United States and Canada that simplifies how you register your commercial vehicles.
Today, IRP allows you to register your truck in your home state (your "base jurisdiction") and pay one fee. Your base state then splits that money with the other states you drive in based on the miles you travel in each one.
When you register for IRP, you receive a set of Apportioned Plates and a Cab Card. The Cab Card is a critical piece of paper that lists every jurisdiction you are legally allowed to operate in and the weight you are registered for. You must keep the original IRP Cab Card in your vehicle at all times.
What Is IFTA?
The International Fuel Tax Agreement (IFTA) is a tax collection agreement that simplifies how carriers pay fuel taxes.
Every state uses fuel taxes to fund their roads. When you buy diesel at the pump, you pay that state’s tax. However, commercial trucks drive long distances, often buying fuel in one state but burning it in another.
IFTA balances this out. Instead of filing a tax return with every state you visit, you file one quarterly fuel tax report with your base state. This report calculates the fuel you bought versus the fuel you burned in each jurisdiction.
If you bought a lot of fuel in a state with high taxes but did most of your driving in states where the tax is low, you might get a credit.
On the other hand, if you drove a lot in a high-tax state but bought all of your fuel in a state where it is cheap, you will likely owe fuel taxes.
You are required to report quarterly to inform your base state how many miles you traveled and how many gallons of fuel you purchased in each jurisdiction. Once you register, you will receive IFTA decals that must be placed on both sides of your truck’s cab to show that you have obtained an IFTA account.
Who Needs to Register?
Not every truck on the road needs IFTA or IRP. These regulations generally apply to "Qualified Motor Vehicles." You are likely required to register for both if your vehicle travels in two or more jurisdictions (interstate travel) and meets one of the following criteria:
The vehicle has two axles and a gross vehicle weight (or registered gross vehicle weight) exceeding 26,000 pounds.
The vehicle has three or more axles, regardless of weight.
The vehicle is used in a combination (like a truck and gooseneck trailer) and the combined weight exceeds 26,000 pounds.
If your truck stays entirely within one state, you generally do not need IFTA or IRP.
The Major Differences
The easiest way to remember the difference is that IRP is about the tags on your truck, and IFTA is about the fuel in your tank.
IRP covers your vehicle registration. You renew this annually.
IFTA covers your fuel taxes. You file reports for this quarterly (four times a year) and renew your account regularly.
Why IFTA & IRP Can Be Difficult to File
First off, since you file for IFTA & IRP with your base state, each state can have variations in the application process. Some states require additional supporting documents to be included with your application, some require in-person application submission, and some require you to have a state-specific permit before you can even file.
Additionally, virtually every state can take several weeks to process your application once it has been submitted. Errors or omissions on your application can add days or weeks onto the time it takes the state to process your IFTA & IRP.
Especially for IRP, mistakes on your application can prevent you from operating in certain states, or cause you to pay hundreds or thousands of dollars more than necessary to obtain your apportioned registration.
Staying Compliant
Just filing for IFTA & IRP alone can be one of the biggest hurdles that companies face when it comes to managing their legal requirements. Even after you have successfully obtained both accounts, compliance does not end with putting the sticker on your truck.
The most difficult part of IFTA and IRP is the record-keeping. You are required to track the mileage driven in each state and keep receipts for every gallon of fuel purchased.
If you are audited, you must be able to prove exactly where your truck was and how much fuel was used. Most modern carriers use their Electronic Logging Devices (ELDs) to help track this data, but the responsibility ultimately falls on you to ensure the numbers are accurate.
Navigating these federal and state regulations takes time and precision. Errors on your application can delay your plates, and missing a quarterly tax deadline can result in significant penalties.
At TIPS, we handle these filings for thousands of carriers so they can focus on the road. Whether you need to set up your initial accounts or manage your quarterly filings, our team is ready to ensure your paperwork is perfect.
For questions, concerns, or to get expert help with ensuring your IFTA & IRP are obtained as quickly as possible, call us today.