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How effective is the international fuel tax agreement as a multistate tax administration model? A view from the states

Juita-Elena (Wie) Yusuf (Department of Urban Studies and Public Administration, Old Dominion University)
Lenahan O’Connell (Kentucky Transportation Center)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 March 2012

81

Abstract

The International Fuel Tax Agreement (IFTA) was established to reduce the complexities of reporting, allocating, and collecting diesel fuel taxes from interstate commercial carriers operating in multiple jurisdictions. This paper examines IFTA’s effectiveness as a multistate tax administration model from the perspective of the states. We identify three criteria of effectiveness and use a survey of IFTA officials in the member states and provinces as well as additional data provided by IFTA, Inc to assess IFTA’s effectiveness. We conclude that (1) IFTA promotes inter-jurisdictional cooperation and revenue transfers; (2) carriers do not locate disproportionately in low tax jurisdictions; and (3) IFTA’s audit system, which relies on carrier record-keeping, may not be effectively preventing tax evasion.

Citation

(Wie) Yusuf, J.-E. and O’Connell, L. (2012), "How effective is the international fuel tax agreement as a multistate tax administration model? A view from the states", Journal of Public Budgeting, Accounting & Financial Management, Vol. 24 No. 4, pp. 535-557. https://doi.org/10.1108/JPBAFM-24-04-2012-B001

Publisher

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Emerald Publishing Limited

Copyright © 2012 by PrAcademics Press

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