['Fleet Taxes']
['Highway use - Mileage tax']
07/19/2024
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International Fuel Tax Agreement (IFTA)
IFTA applies to qualified vehicles operating in more than one IFTA jurisdiction. A qualified motor vehicle is a motor vehicle used, designed, or maintained for transportation of persons or property and that:
- Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; or
- Has three or more axles regardless of weight; or
- Is used in combination, when the weight of such combination exceeds 26,000 pounds gross vehicle weight.
IFTA does not apply to recreational vehicles; however, IFTA does apply to recreational vehicles used in connection with a business endeavor.
All fuel usage of gasoline, diesel, gasohol, propane, LNG, CNG, ethanol, methanol, E85, M85, A55, and biodiesel must be reported on the quarterly IFTA tax return.
A carrier operating qualified motor vehicles both interstate and intrastate must obtain IFTA decals for the interstate vehicles and intrastate decals for the intrastate vehicles. Although both IFTA decals and intrastate decals are separate licenses, both licenses are under one account with the North Carolina Department of Revenue. The carrier does not report intrastate vehicles on the quarterly IFTA returns.
IFTA licensees in North Carolina wishing to use global positioning mileage systems (GPS) are no longer required to have the system approved by the North Carolina Motor Fuels Tax Division. Licensees using GPS systems must maintain records as set forth by IFTA, Inc. and the North Carolina IFTA Compliance Manual.
IFTA fees
IFTA license and decals, no fee
Temporary decal permit
A 30-day temporary IFTA decal permit is available at no fee through the state office, providing the carrier is in good standing and has a valid IFTA license.
All miles traveled when operating under an IFTA temporary decal permit must be reported on the quarterly tax return.
Fuel use tax
North Carolina's intrastate fuel tax reporting law applies to intrastate motor vehicles that are used, designed, or maintained for transportation of persons or property and have two axles and exceed 26,000 pounds gross vehicle weight (GVW) or registered GVW, have three or more axles regardless of weight, or are used in a combination when the weight of that combination exceeds 26,000 pounds GVW.
North Carolina carriers that operate intrastate only with qualified motor vehicles will be issued a license and two decals per vehicle, to be displayed on both sides of the vehicle's cab. A copy of the license must be carried in the vehicles covered by the license.
The carrier does not file quarterly returns but must keep track of the fuel purchases and mileage of the intrastate vehicles to prove operations in the event of an audit.
Mileage/Highway use taxes
North Carolina imposes a highway use tax for the privilege of using the highways in North Carolina; however, the fee is paid to the Commissioner only when filing an application for a Certificate of Title on the vehicle. The tax is in lieu of a sales tax.
Tax refunds or credits
IFTA
North Carolina will allow fuel credit for tax paid fuel purchases on the quarterly IFTA return. Any excess tax paid over liability in any member jurisdiction will be credited in full to the licensee’s tax liability in other member jurisdictions or to the licensee’s account ledger as appropriate. Refunds will only be made if the tax liability is satisfied in all member jurisdictions.
PTO/Reefer fuel
North Carolina allows for refunds on tax-paid fuel used in reefer or power take-off equipment, providing the carrier paid the tax and the fuel is placed in a separate fueling compartment. While a refund permit is not required, refunds must be requested within three years from date of purchase. A form Gas-1201 Claim for Refund-Tax-paid Motor Fuel Used Off-Highway, together with the original fuel receipts, must be submitted for all refund requests.
Persons who purchase and use motor fuel for the off-highway operation of special mobile equipment may receive a quarterly refund for the excise tax paid during the preceding quarter, at a rate equal to the flat cents-per-gallon rate plus the variable cents-per-gallon rate in effect during the quarter for which the refund is claimed, less the amount of sales and use tax or privilege tax due on the fuel.
Special mobile equipment includes any of the following:
- A vehicle that has a permanently attached crane, mill, well-boring apparatus, ditch-digging apparatus, air compressor, electric welder, feed mixer, grinder, or other similar apparatus, that is driven on the highway only to get to and from a non-highway job, and that is not designed or used primarily for the transportation of persons or property.
- A vehicle that has permanently attached special equipment and is used only for parade purposes.
- A vehicle that is privately owned, has permanently attached fire-fighting equipment, and is used only for fire-fighting purposes.
- A vehicle that has permanently attached playground equipment and is used only for playground purposes.
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['Fleet Taxes']
['Highway use - Mileage tax']
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