History and Nature of IFTA

New IFTA Attorney trainingClark Snelson Utah Assistant AG( with thanks to Ted Spangler, former Idaho Assistant A.G. retired)

Why IFTA?

Carriers wheeled 8 foot high stack of state fuel tax filings into congress and said “we need help”

Inconsistent filing periods, definitions, record keeping requirements, rules and laws made compliance difficult

If something did not change, congress

threatened action

State cooperative model RIFTA

1983 Birth of IFTA

Arizona, Iowa and Washington form the “International Fuels Tax Agreement.”

Go big or go home…. Took RIFTA cooperative concept with view to a broader application.

1984 Federal legislation authorizes

working group on motor carrier fuel taxes

IFTA, RIFTA looked at as way to address carriers concerns, while maintaining state control

1987-1990 New model IFTA agreement

adopted by member states Original three members grows to

six: Arizona, Idaho, Iowa, Minnesota, Oklahoma & Washington.

Six grows to 16. IFTA gains momentum!

1991 Congress acts-- ISTEA Intermodal Surface Transportation

Efficiency Act (ISTEA) enacted by Congress (49 USC 31701 – 31707)

Funds working group to assist implementation

September 30, 1996 deadline for US states.

49 U.S.C. 31705(a) Reporting requirements.--After

September 30, 1996, a State may establish, maintain, or enforce a law or regulation that has a fuel use tax reporting requirement (including any tax reporting form) only if the requirement conforms with the International Fuel Tax Agreement.

49 U.S.C. 31705(b) Payment.--After September 30, 1996, a

State may establish, maintain, or enforce a law or regulation that provides for the payment of a fuel use tax only if the law or regulation conforms with the International Fuel Tax Agreement as it applies to collection of a fuel use tax by a single base State and proportional sharing of fuel use taxes charged among the States where a commercial motor vehicle is operated.

Exceptions Alaska & Hawaii No real

Interstate trucking concerns RFTA states:

Maine New Hampshire Vermont

1991 IFTA goes corporate IFTA, Inc. formed as Arizona

nonprofit corporation

Administrative body for IFTA 9 member governing board Contracted with Lockheed IMS for

staffing and support.

IFTA Staff Executive Director Program Director Information Systems Administrator Webmaster Events Coordinator Executive Assistant Program Compliance Administrator

(part time)

1992 IFTA, Inc. hires Executive Director

IFTA goes international, Alberta first Canadian member

22 Jurisdictions particapating

Base state working group formed to assist implementation

Base state working group Members from: NGA, AAMVA, NCSL, FTA,

IFTA, Inc. Bd. & RFTA

Provide technical assistance to IFTA and IRP

Recommend procedures

Figure out “what have we done, and how are we going to make this work”

1994

IFTA, Inc assumes duties from Lockheed - Opens office

Adopted peer review - now “Program Compliance Reviews”

38 Jurisdictions

1996 ALL ABOARD!!

ISTEA mandate take effect. States must conform to IFTA to

require fuel tax reporting and impose fuel use tax. 48 U.S. States (Alaska and

Hawaii exempt) 10 Canadian Provinces Current membership

1997-1999 NCSL Project

States wonder “What did we just do?”State Legislation and Constitutional

Provisions Project contracted with NCSL to assist states in implementing IFTA

NCSL works with IFTA representatives to study IFTA

1999 NCSL issues report to state legislatures

What is IFTA & Why Should I Care?

What is is determines how you defend it Need to know the consequences of

taking a position will effect more that the results in your case

We need to be consistent in representing to the courts what IFTA is

What IFTA is governs how it can grow and change

Effects enforcement and collection

IFTA has many characteristics Interstate compact with congressional

approval Voluntary agreement between truckers

and states Aspects of a mutual agency relationship State statutory authority State regulatory authority Reciprocal State laws

IFTA is a hybrid agreement

Conclusions of NCSL report: 1. Core concepts are an interstate

compact under the Compact Clause of the the US Constitution

2. Implemented by reciprocal statutes.

3. Administered through reciprocal administrative agreements

Core Concepts (Reflected in ISTEA)

ISTEA mandates state conformity with core concepts:

Single Base jurisdiction concept for: reporting payment auditing

Uniform definition of taxpayer Jurisdiction retention of substantive tax

authority (e.g., rates, exemptions)

Compact Clause Implications Compact provisions are federal law

Can preempt operation of inconsistent state law

Cuyler v. Adams 449 U.S. 433 (1980)

Implemented by reciprocal statutes Reflect that IFTA is an agreement to

which each jurisdiction is a party Proper delegations of authority to

administrators (not core provisions or legislative power)

Clear assessment & collection authority

Beware of incorporation by reference problems

Administered through reciprocal administrative agreement.

Provides flexibility for the details of administration, collection and enforcement

States can adopt administrative rules consistent with the agreement

Underutilized in most jurisdictions

IFTA is not a federal mandate

Began without federal action

States allowed to amend IFTA

Few federal components

New York v. US, 505 US 144 (1992)

“No matter how powerful the federal interest involved, the Constitution simply does not give Congress the authority to require the States to regulate. The Constitution instead gives Congress the authority to regulate matters directly and to pre-empt contrary state regulation. Where a federal interest is sufficiently strong to cause Congress to legislate, it must do so directly; it may not conscript state governments as its agents.”

Printz v US521 U.S. 898 (1996)

"[E]ven where Congress has the authority under the Constitution to pass laws requiring or prohibiting certain acts, it lacks the power directly to compel the States to require or prohibit those

acts…. "

Where is IFTA?

1. Articles of Agreement

2. Procedures manual

3. Audit manual

R120GOVERNING DOCUMENTS

The Audit Manual and Procedures Manual authorized by this Agreement are equally expressive of, and constitute evidence of this multijurisdictional agreement. The provisions of all three IFTA documents shall be equally binding upon the member jurisdictions and IFTA licensees.

What It All Means IFTA is:

Widely accepted Effective Adaptable

AND

Largely untested in court

Questions?