IFTA penalty and interest calculator.

What the Articles of Agreement say

Penalty (R1220.100). The base jurisdiction may assess $50.00 or 10 percent of delinquent taxes, whichever is greater, for failing to file a tax return, filing a late tax return or underpaying taxes due. R1220.300 adds that nothing in the Agreement limits a base jurisdiction’s authority to impose other penalties under its own laws, so the actual bill can differ.

Interest (R1230). The base jurisdiction assesses interest on delinquent taxes for each jurisdiction. For a fleet based in a U.S. jurisdiction the annual rate is 2 percentage points above the IRS underpayment rate under Internal Revenue Code §6621(a)(2), adjusted each January 1, accruing monthly at one twelfth of the annual rate. For a fleet based in Canada the rate is the 1-year Canadian federal Treasury bill rate published by the Bank of Canada in November of the prior year, plus two percent rounded up, adjusted annually. Interest on a tax return is computed from the date the tax was due, for each month or fraction of a month, until paid (R1230.300.005).

How this calculator counts

It treats the annual rate you enter as a simple (non-compounding) rate on the unpaid tax, multiplies by the number of months counted, and adds the penalty when the payment date is after the due date. Interest is calculated separately for each jurisdiction in practice, so if you underpaid several, run each jurisdiction’s tax through it and add the results. Penalty relief and waivers are covered by R1260 and your base jurisdiction’s procedures.

Worked example. $200 of tax paid May 15 on a due date of April 30 is 1 month late: penalty $50 (the 10% would be only $20), interest 200 × 8% ÷ 12 = $1.33, total $251.33.