International Fuel Tax Agreement | Recordkeeping

International Fuel Tax Agreement (IFTA) motor carriers are subject to audit as a provision of participation in the program. IFTA carriers are required to retain all records to substantiate tax reports for four (4) years from the due date of the return or date filed, whichever is later. Recordkeeping periods are longer if reports or returns are not filed.

IFTA audits are conducted to verify that the fuel used and mileage is correctly reported on IFTA quarterly tax returns. The Field Audit Section audits the records of Colorado licensees on behalf of all member jurisdictions. Noncompliance with any recordkeeping requirement may be cause for revocation of the license and disallowance of claimed credits. A licensee may request that its license be canceled. 

Fuel Purchased, Received & Used

A complete record of all fuel purchased, received, and used in the conduct of business must be maintained. These records must contain the following:
  1. The date of each receipt of fuel
  2. The name and address of the person from whom the fuel was purchased or received
  3. The number of gallons received
  4. The type of fuel
  5. The vehicle or equipment into which the fuel was placed

Mileage Records

Detailed mileage records on an individual vehicle basis must be maintained. These records must contain the following:
  1. Total number taxable and nontaxable gallons of motor fuel
  2. Total miles traveled for taxable and nontaxable use
  3. Mileage and taxable/non-taxable usage recaps for each vehicle for each jurisdiction in which the vehicle operated

Credit for Tax-Paid Purchases

To obtain credit on the tax report for tax-paid purchases on a jurisdictional basis, the following must be kept in your records: a receipt, invoice, credit card receipt, automated vendor generated invoice or transaction listing, or microfilm/microfiche of the receipt or invoice that shows evidence of the purchase and that tax was paid. An acceptable receipt or invoice taken as credit must include:
  1. Date of purchase
  2. Seller’s name and address
  3. Number of gallons purchased
  4. Fuel type
  5. Price per gallon or total amount of sale
  6. Unit numbers
  7. Purchaser’s name

Lessee/Lessor Agreement

In the case of a lessee/lessor agreement, receipts will be accepted in either name, provided a legal connection can be made to the reporting party for that purchase. In the case of withdrawals from licensee-owned, tax-paid bulk storage, credit may be obtained if the following detailed records are maintained:
  1. Date of withdrawal
  2. Number of gallons
  3. Fuel type
  4. Unit number
  5. Purchase and inventory records to substantiate that tax was paid on all bulk purchases. Inventory shall be maintained on first-in, first-out basis.