IFTA Bond
What does IFTA mean?
IFTA stands for International Fuel Tax Agreement. This agreement between the lower 48 states in the U.S. and the 10 Canadian provinces bordering the U.S. IFTA makes it simpler for motor carriers to work across multiple states and Canada. Carriers that operate trucks that transport commercial goods over state lines or across the U.S.-Canadian border (and meet other criteria) may need an IFTA license.
What is an IFTA bond?
An IFTA bond is a type of fuel tax bond required for any carrier wishing to comply with the International Fuel Tax Agreement. By obtaining this bond, carriers agree to follow state laws and regulations for their industry, including paying state fuel taxes on time. If an operator fails to pay taxes, they could face bond claims. The surety must step in to settle the claim for them upfront and then will seek reimbursement from the operator.
This bond also falls into the financial guarantee bond category, ensuring payment of financial obligations.
Get Your IFTA Bond:
Quick Takeaways
- The International Fuel Tax Agreement is between the lower 48 states and the 10 Canadian provinces bordering the U.S.
- By obtaining an IFTA bond, carriers agree to follow state laws and regulations for their industry, including paying state fuel taxes on time.
- The cost of your bond will depend on the IFTA bond requirements in your state, likely outlined by your state’s Department of Transportation or Department of Motor Vehicles.
- Once licensed under IFTA, you must report inter-jurisdictional mileage and fuel usage to your state.
Who needs this type of surety bond?
If you’re a carrier operating a vehicle in any of the 48 contiguous United States or the 10 Canadian Provinces participating in the IFTA, you qualify for an IFTA license. This means you may travel through all IFTA jurisdictions and only must submit one fuel tax return each quarter – to your base jurisdiction. Your base jurisdiction is where you register your vehicle, maintain records and operational control, and accrue some mileage.
Here are the criteria for qualifying for an IFTA license. If you qualify, you may need to display decals and post a surety bond:
- The vehicle has three or more axles.
- The vehicle has a gross weight of 26,000 pounds or more.
- Your trucks transport commercial goods over state lines or across the U.S.-Canadian border.
How much do IFTA surety bonds cost?
The cost of your bond will depend on the IFTA bond requirements in your state, likely outlined by your state’s Department of Transportation or Department of Motor Vehicles. For example, if you need a $5,000 Arizona IFTA bond, you will pay a small percentage of that amount as your premium. Typically, the better your credit score and financial history, the lower your premium rate will be.
How to Become an Interstate Motor Carrier
To apply for an IFTA license, you must provide the following information:
- Registered business name
- Mailing address
- USDOT number
- Federal business number
Once licensed under the IFTA, you must report inter-jurisdictional mileage and fuel usage to your state. Your state will then collect the correct amount of taxes from you quarterly. You must also display IFTA decals on your vehicle – or you could face fines.
You can find your state’s specific requirements on the TruckLogics website.
Apply for Your IFTA Surety Bond
ZipBonds is the fastest and most secure way to get the license and permit bonds you need. We take out the pain of long, complicated applications. Most of our bonds are approved and processed immediately. Call us at (888) 435-4191 or start the form online to get bonded ASAP.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.