Delaware is your base jurisdiction for IFTA licensing and reporting if:

• your qualified motor vehicles are registered in Delaware;
• you have an established place of business in Delaware from which motor carrier operations are performed;
• you maintain the operational control and operational records for qualified motor vehicles in Delaware or can make those records available in Delaware; and
• you have qualified motor vehicles that actually travel on Delaware highways.

The Delaware License Application for International Fuel Tax Agreement (IFTA), can be obtained from the Delaware Motor Carrier Service Section / IFTA Unit. All applications are reviewed for completeness. Incomplete applications will either be returned or a follow-up call will be placed to obtain additional information. Verified applications will be processed and operating credentials issued. Each license is renewable annually.

An IFTA identification number will be issued consisting of the applicant's Federal Employer Identification Number. If the applicant does not have a Federal Employer Identification Number, the Social Security Number of an officer of the company may be used.

Each carrier is issued one IFTA license. We suggest that the original license be kept in the office. The carrier is required to make copies of the license so that one copy is carried in each qualified vehicle. Failure to display a copy of the license can subject the vehicle operator to the purchase of a trip permit and a citation. If the original copy of the IFTA license is lost or destroyed, a duplicate may be obtained by submitting a request to the Delaware Motor Carrier Service Section / IFTA Unit.

If you have more than one fleet of qualified motor vehicles and the fleets are based in more than one IFTA jurisdiction, you may request to consolidate those fleets in a single base jurisdiction. You will get a single IFTA license and the decals needed for all vehicles from that base jurisdiction. Each of the jurisdictions where the fleets are based must agree to the consolidation.

If you want to consolidate your fleets with Delaware as the base jurisdiction, a written request must be submitted to the Motor Carrier Services Section/IFTA Unit. The request must include a list of the jurisdictions where your fleets are located and the number of qualified motor vehicles in each fleet.

Each carrier is issued a set of vehicle identification decals for each qualified vehicle in its fleet. The identification decals must be placed on the exterior portion of both sides of the cab. Decals are not vehicle specific. Failure to display the identification decal in the required locations or to carry a temporary permit may subject the vehicle operator to the purchase of a trip permit and a citation. The IFTA decal may be displayed one month prior to its effective date. Carriers from new member jurisdictions are allowed 60 days from the date of the new member's IFTA program implementation to display the IFTA License and decal. All IFTA carriers are allowed a two-month grace period to display the current year IFTA license and decal.

In the case of transporters, manufacturers, dealers, or drive-away operations, the IFTA decal need not be permanently affixed but may be temporarily displayed in a visible manner on both sides of the cab. In the case of buses, the decal may be located on the driver's side.

Decals are obtained annually at the time of renewal for all qualified motor vehicles based in Delaware. To obtain additional decals an application must be submitted to the Delaware Motor Carrier Service Section/IFTA Unit.

Delaware may provide for the issuance of a 30-day IFTA temporary permit to a carrier in good standing in lieu of display of the annual decals. This permit may be obtained from the Delaware Motor Carrier Services Section/IFTA Unit.

In lieu of permanent decals, an IFTA temporary permit may be issued by the base jurisdiction valid for all member jurisdictions. The temporary permit must be vehicle specific and contain the expiration date. The temporary permit need not be displayed but shall be carried in the vehicle.

Failure to carry the temporary permit may subject the vehicle operator to the purchase of a trip permit and a citation.

Bonds are not required of first-time applicants. A bond may be required when a carrier fails to file a timely report, when tax has not been remitted, or when an audit indicates severe problems. A carrier required to post a bond must provide a surety bond. Security required is a $500.00 minimum or twice the amount of the liability, whichever is greater.

A lessor regularly engaged in the business of leasing or renting motor vehicles without drivers for compensation to carriers or other lessees may be deemed to be the carrier, and such lessor may be issued an IFTA license if an application has been properly filed and approved by the base jurisdiction.

For leases of thirty days or more, in the case of a carrier using independent contractors, the lessor and lessee are given the option of designating which one will report and pay fuel use tax.

For motor vehicle leases of less than thirty days, the IFTA permit-holder for the motor vehicle under lease is liable for fuel use tax.

In the case of a household goods carrier using independent contractors, agents or service representatives, the party liable for motor fuels tax shall be:

• The lessee (carrier) when the motor vehicle is operated under the lessee's jurisdictional operating authority. The base jurisdiction for purpose of this agreement shall be the base jurisdiction of the lessee (carrier) regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes by the lessor or lessee.
• The lessor (independent contractor, agent or service representative) when the qualified motor vehicle is being operated under the lessor's jurisdictional operating authority. The base jurisdiction for purposes of this agreement shall be the base jurisdiction of the lessor regardless of the jurisdiction in which the qualified motor vehicle is registered for vehicle registration purposes.

No member jurisdiction shall require the filing of such leases, but such leases shall be made available upon request of any member jurisdiction.

Every quarter, all licensees must submit the International Fuel Tax Agreement Tax Report. A report must be submitted even if there were no operations. Tax reports will be furnished each quarter 30 days prior to the due date of the report, along with a current tax rate chart for each member jurisdiction.

Failure to receive the tax report does not relieve the carrier from the obligation of filing in a timely manner or submitting the tax report.

All tax reports will be filed on a quarterly basis. The reporting quarters and due dates are:

When filing a tax report, the carrier will apply an overpayment generated in one jurisdiction to the taxes owed to another jurisdiction and remit the net tax owed to Delaware on the tax report.

A penalty of $50.00 or 10% percent of the net tax liability, whichever is greater, will be assessed on late-filed reports or for underpayment of tax due. If the tax liability is zero or a credit, the late filing penalty is $50.00.

To avoid penalty for late filing, the tax reports must be postmarked no later than midnight on the date indicated. If the last day of the month falls on a Saturday, Sunday, or legal holiday, the next business day is considered the final filing date. Tax reports are considered filed and received on the date shown by the U. S. Postal Service or Delivery Service cancellation mark stamped on the envelope containing the report. If a report is hand delivered, it will be considered filed and received on the date it was delivered to the Delaware Motor Carrier Service Section / IFTA Unit.

Interest is assessed on all delinquent taxes due each jurisdiction. The interest rate is one percent per month. Interest will be calculated from the date the tax was due for each month or portion thereof until paid.

Carriers are required to report fuel and distance traveled in the U.S. measurements. Tax rates will be converted using the following factors and will be computed to the nearest one-tenth of a cent:

For reporting fuels that cannot be measured in liters or gallons (Example: compressed natural gas) the licensee shall report the fuel at the conversion factor use by the jurisdiction in which the fuel was consumed.

IFTA recognizes that some jurisdictions have unique economic and geographic characteristics that have given rise to various definitions of tax exempt miles. . All jurisdictions require documentation to support a claim of tax exempt miles. Please contact the individual member jurisdiction for additional information.

When computing the average miles per gallon (MPG) all miles traveled and all fuels purchased while operating under a trip permit should be included in total miles traveled in all jurisdictions and total gallons used in all jurisdictions, respectively.

The miles operated under a trip permit should also be included in total miles traveled in that particular jurisdiction. The miles operated under a trip permit should be deducted from the total miles in determining the total taxable miles reported. The fuel purchased while operating under a trip permit should be included as part of the tax-paid gallons.

The miles operated under a temporary permit must be included in total miles traveled in that particular jurisdiction. Tax-paid fuel purchased while operating under a temporary permit must be included as part of the tax-paid gallons.

Every IFTA carrier is subject to audit. The IFTA Agreement requires that at least 15% of the carriers based in the jurisdiction be audited at least once every five years. The purpose of an IFTA fuel tax audit is to verify the fuel and mileage data reported on your IFTA tax return. If you are a Delaware-based IFTA carrier, Delaware will audit your return on behalf of all member jurisdictions.

If you are selected for an audit, the Division of Motor Vehicles Audit Section will contact you in advance to make arrangements concerning the place, date and time of the audit. They will advise you of the audit period and the records needed. A written confirmation will also be made. If your records are not maintained in Delaware, you must make them available in Delaware or you may be required to pay necessary expenses for travel, lodging and meals associated with the performance of the audit.

If a carrier does not provide adequate records which are acceptable for audit purposes:

• Company operations may be estimated based on prior experience of the carrier or by comparison to similar operations;
• A standard of 4.0 miles per gallon will be used;
• All claims for tax-paid fuel without supporting documentation will be disallowed;
• The burden of proof lies with the licensee.

Upon completion of the audit, the findings are reported in writing to the carrier and all other jurisdictions in which operations are conducted. Delaware will collect any tax, penalty, and interest owed to all member jurisdictions.

A carrier or applicant may appeal an action or audit findings issued by the commissioner of any member jurisdiction by making a written request for a hearing within 30 days after the service of the notice of the original action or finding. If the hearing is not requested within 30 days in writing, the original finding or action is final.

The base jurisdiction shall give at least 20 days' written notice of the time and place of the hearing.

The base jurisdiction will notify the appellant of the findings of fact and ruling on the appeal. In the case of an audit, if the carrier is still in disagreement with the original finding, the carrier may request any or every jurisdiction to audit the carrier's records. Each jurisdiction to which a request is made may elect to accept or deny the request. Each jurisdiction electing to audit the carrier's records will audit only for it's own portion of the carrier's operations. The carrier shall make records available at the office of the jurisdiction or at a place designated by the jurisdiction or pay reasonable per diem and travel expenses associated with conducting an audit at the carrier's place of business.

The appellant may appear in person and/or be represented by counsel at the hearing and entitled to produce witnesses, document, or other pertinent material to substantiate the appeal.

Further appeal of any jurisdiction's finding will proceed in accordance with that jurisdiction's laws.

In the event that any licensee fails, neglects, or refuses to file a tax report when due, Motor Carrier Services Section will, on the basis of the best information available, determine the tax liability of the licensee for each jurisdiction including the appropriate penalties and interest. An assessment based on this procedure is considered to be correct. In any case where the validity of the assessment is in question, the carrier must prove that the assessment is erroneous or excessive.

If a tax delinquency has not been satisfied or the licensee has not filed a written appeal within a 30-day period from the notification of delinquency, a notice of revocation will be sent by certified mail to the carrier advising them of the immediate revocation of the fuel tax license. Noncompliance with the record-keeping requirements outlined in the license record requirement section of this manual may also be cause for revocation of the license.

The Motor Carrier Services Section may reinstate an IFTA license once the carrier files all required reports and remits all outstanding liabilities due all member jurisdictions. The Motor Carrier Services Section may also require the carrier to post a surety bond in an amount sufficient to satisfy any potential liabilities of all member jurisdictions.

In the event of a bankruptcy, notice must be sent to the Motor Carrier Services Section. Fuel tax licenses are revoked for failure to file reports and/or failure to pay all fuel tax, penalty and interest due. To avoid license revocation, contact our office for assistance.

A carrier shall maintain detailed distance records that show operations on an Individual Vehicle Mileage Record (IVMR). The operational records shall contain, but not be limited to:

• Taxable and non-taxable usage of fuel;
• Distance traveled for taxable and non-taxable use and;
• Distance recaps for each vehicle for each jurisdiction in which the vehicle operated.

An acceptable distance accounting system is necessary to substantiate the information reported on the tax report filed quarterly. A carrier's system, at a minimum, must include distance data on each individual vehicle for each trip and be summarized in monthly fleet summaries. Supporting information should include:

• Registrant's name;
• Vehicle fleet number;
• Unit number or tag number;
• Date of trip (starting and ending);
• Trip origin and destination;
• Beginning and ending odometer or hubodometer reading of the trip;
• Route of travel;
• Miles by jurisdiction (the state miles traveled must be based upon mileage generation system, maps, odometer/hubodometer readings at state lines, or on-board recording devices. Jurisdiction mileage cannot be estimated);
• Total trip miles and;
• Toll receipts and any other evidence to document the movement of the vehicle.

The carrier must maintain complete records, of all fuel purchased, received, and used in the conduct of its business.

Fuel purchases are purchases of gasoline, diesel, gasohol, liquid petroleum gas, and compressed natural gas. Separate totals must be compiled for each fuel type.

Retail fuel purchases and bulk fuel purchases are to be accounted for separately.

The fuel records shall contain, but not be limited to:

• Date of fuel purchase;
• Seller's name and address, machine printed or credit card imprinted. Address shown must be the state in which sale is made;
• Number of gallons purchased;
• Type of fuel; and
• Unit number or tag number.

Retail purchases must be supported by a receipt or invoice, credit card receipt, automated vendor generated invoice or transaction listing, or microfilm. Microfilmed records are acceptable for audit purposes providing the original records are maintained for four years and are available for reference, if needed; and also provided that a microfilm viewer is made available by the carrier. Please refer to the definition of an acceptable receipt or invoice as stated below.

Receipts for retail fuel purchases must identify the vehicle by the unit number or tag number, as distance traveled and fuel consumption is reported only for vehicles identified as part of the carrier's operation.

An acceptable receipt or invoice must include, but shall not be limited to, the following:

• Date of purchase;
• Seller's name and address, must be machine printed or credit card imprinted;
• Number of gallons purchased;
• Type of fuel;
• Price per gallon or total amount of sale;
• Unit number or tag number; and
• Purchase's name.

Bulk fuel is normally delivered tax paid into storage facilities maintained by the carrier, and fuel tax may not be paid at the time of delivery. The carrier must retain copies of all delivery tickets and/or receipts.

Bulk fuel distribution records from bulk storage facilities must be maintained distinguishing fuel placed in qualified vehicles from other uses. In addition, evidence of inventory reconciliation must be maintained to verify the completeness of the receipt and distribution records.

To obtain credit for withdrawals from carrier-owned, tax paid bulk storage, the following minimum records must be maintained:

• Date of withdrawal;
• Number of gallons;
• Type of fuel;
• Unit number or tag number; and
• Purchase and inventory records to substantiate that tax was paid on all bulk purchases.

Upon application by the carrier, the base jurisdiction may waive the requirement of unit numbers for fuel placed into qualified motor vehicles provided that only IFTA vehicles are fueled from the storage facility. The carrier must show that adequate records are maintained to distinguish fuel placed in qualified vs. non-qualified vehicles for all member jurisdictions.

At the option of the carrier, on-board recording devices, satellite tracking systems or other electronic recording systems may be used in lieu of or in addition to handwritten trip reports for record-keeping purposes. Please contact the Motor Fuel Tax Administration for additional record requirements.

Every carrier must maintain records to support information reported on the quarterly tax return for a period of 4 years from the due date of the report or the date filed, whichever is later.

Should you desire to cancel your account, your IFTA license must be returned to this office. If the IFTA license has been lost or destroyed the owner or officer of the company should send a written statement to that effect. You may also request cancellation of your account by marking the cancellation box on your tax report.

A carrier shall receive full credit or refund for tax-paid fuel used outside the jurisdiction where the fuel was purchased. Such a credit, when not refunded, shall be carried over to offset liabilities of the carrier in future reporting periods until the credit is fully offset or until eight calendar quarters shall have passed since the end of the calendar quarter in which the credit accrued, whichever occurs sooner. The carrier shall receive on request a cash refund of any accumulated credits. The base jurisdiction shall allow credits and issue refunds for all of its carriers on behalf of all member jurisdictions.

Refunds to a carrier will be made only when all tax liabilities, including audit assessments, have been satisfied to all member jurisdictions. Refunds will be withheld if the carrier is delinquent for any reporting period.

Refunds determined to be properly due shall be paid within 90-days after receipt of a request for payment from a carrier. If the refund is not paid within the specified time, interest will accrue. Interest will be calculated at 1% per month from the time the refund was due for each month or fraction of a month until paid.

Refunds of tax paid on fuel consumed for exempt purposes must be filed with the jurisdiction in which the fuel was consumed.