Reporting: My vehicle is leased to another company. Do I need to file a quarterly return?
The Motor Carrier Fuel Tax Act specifically references lease agreements. See MCL 207.218.
If you have a current IFTA fuel tax license, you must file the quarterly returns reporting all of the mileage and fuel purchases which occurred under your IFTA credentials. You must file a return even if you had no activity under your license but operated under a lease agreement where IFTA taxes were reported and paid on your behalf by the lessor. In this case, you would file No Operations if the lessor is filing your mileage and fuel purchases on your behalf. The Department may request a copy of your lease agreement if necessary for validation. Three quarters of ineligible travel may result in the cancellation or non-renewal of your license.
If you enter into a lease agreement and the lessor provides you with fuel decals, issued in their name, and they have exclusive use of your equipment, they are to include your activity and fuel purchases on their fuel tax reports until the lease is terminated. Under this scenario, we strongly advise motor carrier lessees to cancel their IFTA fuel tax license. By doing this you will avoid many of the problems associated with delinquent returns and computed assessments. The Department may require you to supply a copy of the lease, copy of the lessors IFTA License, and the decal sequence number they supplied to you.
Protect yourself! Review all lease contracts carefully and ensure the IFTA tax reporting responsibility is clearly defined.
It is important to remember that Michigan statute holds the lessor and lessee jointly and severally liable for any fuel tax liabilities that occur during the term of their lease.