Surety Bond Encyclopedia

International Fuel Tax Agreement (IFTA) Bond - Statewide in Texas

Brief Summary

Texas usually issues an IFTA license with no bond at all. Carriers asked for one are generally behind on returns or payments, or coming out of an audit. A surety bond answers the Comptroller's demand without a cash deposit sitting with the state.

The Texas Comptroller of Public Accounts is the base jurisdiction for Texas IFTA licensees and files this bond on Form 56-100, Continuous Bond for an International Fuel Tax Agreement License. The Comptroller says bonds are generally not required from first-time applicants but may be required when a licensee fails to file returns or remit tax on time, or when an audit shows severe problems. Under the IFTA Procedures Manual the amount is fixed by the base jurisdiction at no less than twice the estimated average tax liability for a reporting period.

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How to Apply for a International Fuel Tax Agreement (IFTA) Bond:

Get the required bond amount from the Comptroller.
Bring overdue IFTA returns and payments current, since late filing and late payment are the usual triggers.
Have the surety issue Form 56-100 in the amount set by the Comptroller.
File the executed bond with the Texas Comptroller of Public Accounts.
Keep filing quarterly IFTA returns by the last day of the month after each quarter.
Renew the license and decals for each calendar year.

Detailed Information About the Texas International Fuel Tax Agreement (IFTA) Bond:

When Texas asks for an IFTA bond

The Comptroller's fuels tax FAQ answers this directly: bonds are generally not required from first-time IFTA applicants. If Texas is the base jurisdiction, the Comptroller may require a bond if a licensee fails to file returns or remit tax on time, or when audit results show severe problems and the other member jurisdictions need protection.

IFTA Articles of Agreement R340 lists the same two triggers and adds a third: an applicant that is not based in a member jurisdiction and applies to Texas under R325.

How much

IFTA Procedures Manual P410 leaves the amount to the base jurisdiction but sets a floor. The bond must be at least twice the estimated average tax liability for the reporting period the licensee files. IFTA returns are quarterly, so the measure is an average quarter of fuel tax owed across all member jurisdictions.

The form and what it guarantees

The Comptroller's bond is Form 56-100, Continuous Bond for an International Fuel Tax Agreement License. Your IFTA return is one consolidated report covering every member jurisdiction where your trucks ran, and R340 ties the bond to protecting the interests of all member jurisdictions, not just Texas.

P430 also allows substitutes for a surety bond, deposited with the base jurisdiction: government or municipal bonds, certificates of deposit, share accounts, cash, or other secure obligations the base jurisdiction accepts.

Who needs an IFTA license at all

A qualified motor vehicle under IFTA R245 has two axles and a gross or registered gross weight over 26,000 pounds, or three or more axles regardless of weight, or is used in a combination weighing over 26,000 pounds. Recreational vehicles are excluded. Texas carriers apply on Form AP-178.

License year and returns

The IFTA license runs for the calendar year ending December 31, and the base jurisdiction issues two decals per vehicle each year, one for each side of the cab. Texas IFTA returns are due on the last day of the month following the end of each calendar quarter.

Eligibility and Requirements for a Texas International Fuel Tax Agreement (IFTA) Bond:

Texas Comptroller of Public Accounts as obligee, acting as IFTA base jurisdiction.
Comptroller Form 56-100, Continuous Bond for an International Fuel Tax Agreement License.
Amount fixed by the Comptroller at no less than twice the estimated average tax liability for a reporting period.
Licensee operating qualified motor vehicles in more than one IFTA jurisdiction.
Surety bond, or an IFTA-permitted substitute such as cash or a certificate of deposit.

Texas International Fuel Tax Agreement (IFTA) Bond FAQs:

Do I need this bond to get my first Texas IFTA license?

Generally no. The Comptroller states that bonds are generally not required from first-time IFTA license applicants. The bond usually follows late returns, late payments or a bad audit.

How does the Comptroller set the amount?

IFTA Procedures Manual P410 requires the base jurisdiction to fix a bond of at least twice the estimated average tax liability for one reporting period. For IFTA that period is a calendar quarter, and the liability covers every member jurisdiction on your return.

Does the bond only protect Texas?

No. You file one consolidated return with Texas that covers every member jurisdiction. R340 lets the base jurisdiction require a bond to protect the interests of the member jurisdictions as a group.

Can I post cash instead?

IFTA Procedures Manual P430 lets a licensee deposit cash, certificates of deposit, government or municipal bonds, share accounts or other secure obligations with the base jurisdiction instead of a surety bond. A surety bond avoids tying up that money.

Which form does Texas use?

Form 56-100, Continuous Bond for an International Fuel Tax Agreement License, listed on the Comptroller's bond forms page. Confirm the amount on your Comptroller notice before the surety issues it.