In the past few days I have started to see letters from the State of Kentucky’s International Fuel Tax Agreement (IFTA) department requesting additional payment due Kentucky State Sealfor the quarter ending 9/30/2012.     According to the letter there was an error on the surcharge rate provided for the 3rd quarter 2012 and they are collecting the difference directly from the IFTA account holder.

How did this happen?  Is it a scam?

All states and provinces in North America belong to IFTA.    IFTA is managed and administered by The International Fuel Tax Association, Inc or IFTA, Inc which is a not-for-profit corporation based in Arizona.    They are responsible to collect and distribute tax rates to other member jurisdictions and in turn member jurisdictions have to follow set rules in submitting changes to their own tax rates.

According to the IFTA Procedures Manual section P1120 titled Tax Rate Reporting under subsection .300 we read;

If notification of a tax rate change is not received by the other jurisdictions at least 60 days prior to the due date of a quarterly tax return for which the change is effective, the other jurisdictions will be relieved from taking extraordinary measures to implement the change.  The jurisdictions that failed to provide adequate notification may, however, collect any additional taxes due directly from the licenseees in the other jurisdictions.

It’s not a scam!

So the state of Kentucky is correct in trying to get back the money owing.  If you happen to get one of these letters from the state requesting more tax due, you are required to pay it, so do just that as soon as possible to avoid penalties and interest.

The letter also mentions some carriers will receive a similar notice for the 4th quarter 2012 as well.

 

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