Administrative Procedure

Administrative Procedure AP 112: Motor Carrier Excise Tax: G.L. c. 64F

Date: 01/31/2018
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws

Sales and Use Tax

IFTA (International Fuels Tax Agreement) Motor Carriers

 

General

 

            An IFTA motor carrier is any person who uses or operates an IFTA qualified motor vehicle for commercial or business purposes on Massachusetts highways and the highways of at least one other International Fuels Tax Agreement (IFTA) jurisdiction.  An IFTA qualified motor vehicle is a vehicle, other than a recreational vehicle, that is used, designated or maintained for the transportation of persons or property and that (i) has two axles and a gross vehicle weight or registered weight exceeding 26,000 pounds; or (ii) has three or more axles on the power unit, regardless of weight; or (iii) is used in combination and the combined gross vehicle weight or registered gross vehicle weight exceeds 26,000 pounds.  IFTA motor carriers must register and file returns with their base-jurisdiction for activity in all IFTA jurisdictions.  All such qualified vehicles using Massachusetts highways must have (1) an IFTA license and (2) two IFTA decals.

Application for License

       IFTA motor carriers based in Massachusetts and traveling in at least on other jurisdiction must file an International Fuel Tax Agreement (IFTA) Massachusetts License Application, IFTA-1, to participate in the IFTA Program. The Department of Revenue (DOR) issues a license and two decals, by mail, for a calendar year. One decal must be affixed to each side of the vehicle. A Federal Identification Number or a Social Security Number may be used when completing the Form IFTA-1. Motor Carriers must apply for a license online through MassTaxConnect. After registering for IFTA, you may log in to your account to order decals. 

Filing Requirements

            IFTA motor carrier tax licensees are required to file with DOR the IFTA Quarterly Fuel Use Tax Return, IFTA-100, and the IFTA Quarterly Fuel Tax Schedule, IFTA-101, by the last day of the month following the close of the quarter, even if no tax is due. Businesses with certain combined tax liabilities at or exceeding $5000 must file electronically through MassTaxConnect. See TIR 16-9. If a licensee's status has changed and the licensee is no longer an IFTA qualified motor carrier, the IFTA license and both IFTA decals and any unused decals must be returned to DOR (see address below) with a letter requesting cancellation, indicating the effective date.

 

            Payment: Businesses with total annual payments in excess of $5000 must make payments electronically through MassTax Connect.  Failure to make electronic payments may result in a penalty under G.L. c. 62C, § 33(g). For those not required to make electronic payments, the payment must be included with the monthly return. The check or money order for the exact amount should be made payable to the Commonwealth of Massachusetts.

 

            Rate of Tax: Current rates can be found under the heading Tax Rate Matrices at www.IFTACH.org.

 

      Exemptions: Fuel used on any turnpike constructed by the Massachusetts Turnpike Authority is exempt. For travel on the Massachusetts Turnpike, IFTA licensees may take the Massachusetts Turnpike exemption for IFTA qualified vehicles only on the IFTA consolidated return. Turnpike miles are included in total IFTA miles (Column G of IFTA-101) and are excluded from taxable miles on the IFTA return (Column H of IFTA-101) for travel in Massachusetts. IFTA carriers may not make separate applications for Turnpike refunds using the Massachusetts Department of Revenue's Special Fuel and/or Gasoline Refund Application for IFTA qualified vehicle travel.

 

            The Turnpike exemption is available only to licensees having 1) toll receipts or invoices issued by the Massachusetts Turnpike Authority and 2) original invoices or sales receipts of motor fuels showing the purchase of the fuel within three days of use on the Massachusetts Turnpike; or evidence that such motor fuel was transferred from bulk storage to the vehicle tank within three days of its use on the Massachusetts Turnpike.

 

            Motor fuel for which the Massachusetts Turnpike exemption is taken is subject to the 6.25% use tax imposed by G.L. c. 64I, § 2. An IFTA licensee must file an annual Massachusetts Business Use Tax Return, Form ST-10, and remit the 6.25% use tax on the cost of the fuel for which the exemption was taken. This return is due with the payment on or before April 15 for purchases made in the prior calendar year. Returns and payments must be filed electronically.

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            Interest and Penalties: If returns are not properly filed, interest and penalties may be assessed. The penalty for failure to file a tax report when due is the greater of fifty dollars ($50.00) or ten percent (10%) of the net tax due to all member jurisdictions. Interest is computed on all delinquent taxes due each jurisdiction at the rate of one percent (1%) per month, from the date the tax was due for each month, or fraction thereof, until paid. Interest is calculated based on IRC § 6621(a) (2) plus 2%. The rate will be subject to adjustment each January 1st for the entire calendar year.

 

            See TIR 99-18 regarding the waiver of G.L. c. 62C, § 33(c) late‑pay penalties and suspension or involuntary collection activities under G.L. c. 62C, § 32(e) when the taxpayer administratively disputes the assessment (or any portion thereof) within DOR or at the Appellate Tax Board or Probate Court.

 

            Extensions of Time to File: For good cause, the Commissioner may grant a reasonable extension of time for filing a return. Requests must be in writing to the address given below. However, failure to pay 80% of the tax required to be paid on or before the due date for payment of tax will void any extension of time to file and the return will be subject to penalty as a late return.

 

            Amended Returns: Taxpayers often discover after filing a return that information was omitted or a mistake was made. To adjust information reported on a prior return, a taxpayer must file an amended return with DOR. An amended return must be filed to increase previously reported tax; to decrease previously reported tax; to report an increase to tax resulting from a federal or state change; to report a decrease in tax resulting from a federal or state change and to make amendments that have no net effect on tax. Most taxpayers are required to amend their returns electronically using MTC. Taxpayers filing amended returns on paper will manually complete the same tax form as used for the original or prior amended return, whichever is filed later, and check the box indicating that the return is an amended. See AP 605, Amending Tax Returns for more details.

 

           

 

            Changing Information or Status: Changes should be made electronically through MTC. A taxpayer who does not have access to MTC may submit changes in writing to the address given below. New decals must be ordered by submitting a new application.

 

            For more information, contact:

 

E-mail address: ifta@dor.state.ma.us

 

Mailing address:

 

Massachusetts Department of Revenue

IFTA Unit

P.O. Box 7027

Boston, MA 02204

(617) 887-5080

 

G.L. c. 62C, §§ 32(e), 33(c)

G.L. c. 64F

G.L. c. 64I, § 2

TIR 99-18

TIR 16-9

Form ST-10, Business Use Tax Return

IFTA-1, International Fuel Tax Agreement (IFTA) Massachusetts License Application

IFTA-100, IFTA Quarterly Fuel Use Tax Return

IFTA-101, IFTA Quarterly Fuel Tax Schedule

Referenced Sources:

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