IFTA

What Is IFTA

IFTA stands for the International Fuel Tax Agreement. It is a cooperative arrangement among 48 US states (excluding Alaska and Hawaii), Washington DC, and 10 Canadian provinces that simplifies how commercial carriers pay fuel taxes when operating across multiple jurisdictions.[^1][^2]

Without IFTA, a trucker driving through 10 states in a week would need separate fuel tax permits and filings for each state. IFTA eliminates that headache. You file one quarterly tax return through your base state, and that state distributes the appropriate tax amounts to every jurisdiction where you drove miles.

For anyone running freight across state lines, understanding IFTA is not optional. It is a mandatory compliance requirement alongside your MC number, USDOT number, and insurance filings. Getting it set up is part of starting a trucking business.

How IFTA Fuel Tax Apportionment Works

The core principle behind IFTA is simple: you owe fuel tax to each state based on the miles you drive in that state, regardless of where you purchased fuel.

Here is how the math works. Each state sets its own fuel tax rate per gallon. Your IFTA return calculates how many miles you drove in each state, determines how many gallons of fuel that mileage consumed based on your fleet's average MPG, and compares that to how much fuel you actually purchased in each state.

If you drove a lot of miles in a state but bought little fuel there, you owe that state money. If you bought more fuel in a state than your mileage consumed, that state owes you a credit.

Simple Example

Say you drove 5,000 miles total in a quarter with an average of 6 MPG, meaning you used about 833 gallons total. You drove 2,000 of those miles in Pennsylvania and 3,000 in Ohio. You bought 500 gallons in Pennsylvania and 333 in Ohio.

Based on mileage, Pennsylvania's share is 333 gallons (2,000 miles / 6 MPG) but you bought 500 gallons there. You overpaid Pennsylvania by 167 gallons worth of tax, so you get a credit. Ohio's share is 500 gallons (3,000 miles / 6 MPG) but you only bought 333 gallons there. You owe Ohio for 167 gallons worth of tax.

The actual calculation happens for every jurisdiction you entered, using each state's specific tax rate. Your quarterly return nets everything out into one payment or one refund.

Quarterly Filing Requirements

IFTA returns must be filed every quarter, even if you did not operate during that quarter.[^1] Filing a zero-mileage return is required to keep your IFTA credentials active. For a complete step-by-step walkthrough of the filing process, see our IFTA reporting guide.

Filing Deadlines

• Q1 (January through March): due April 30
• Q2 (April through June): due July 31
• Q3 (July through September): due October 31
• Q4 (October through December): due January 31

What Goes on the Return

Your quarterly return reports total miles driven in each jurisdiction, total fuel purchased in each jurisdiction broken down by fuel type, and your fleet's calculated MPG. Most carriers file electronically through their base state's online portal.

The return calculates your net tax due or credit for each state. You make a single payment to your base state, which distributes the funds accordingly.

Record-Keeping Requirements

IFTA auditors can examine your records going back four years.[^3] Poor record keeping is one of the most common issues carriers face during IFTA audits.

What to Track

Every fuel purchase. Date, location, number of gallons, fuel type, price per gallon, and total cost. Keep every receipt. Credit card statements alone are not sufficient documentation.

Every trip. Origin, destination, route taken, and miles in each jurisdiction. Your ELD may track this automatically, but verify that it breaks mileage down by state.

Fleet MPG data. Total miles driven divided by total gallons consumed. This number is central to your IFTA calculations.

Many modern ELD systems and fleet management platforms include IFTA reporting features that automatically track miles by jurisdiction. Fuel cards that record purchase location and gallons also simplify the fuel purchase documentation side.

IFTA and Your Cost Per Mile

Fuel taxes are a real operating cost that affects your bottom line. Using a cost per mile calculator that accounts for fuel tax costs gives you a more accurate picture of your true operating expenses.

Fuel tax rates vary significantly by state. Some states charge over $0.60 per gallon in combined state and federal taxes while others are under $0.30. Route planning that accounts for fuel tax differences can save money, though the savings should be weighed against additional miles and time.

Common IFTA Mistakes

Not filing when you did not drive. You must file every quarter to keep your credentials active. Zero-mileage returns take minutes and prevent credential revocation.

Incomplete fuel receipts. Every receipt should show gallons, price, date, and location. Receipts that only show dollar amount without gallons create problems during audits.

Mixing personal and business fuel purchases. Keep personal vehicle fuel purchases on a separate card. Commingled records complicate audits and tax calculations.

Ignoring state permit requirements. Some states require additional permits beyond IFTA for overweight or oversize vehicles. IFTA covers fuel tax only, not all operating permits.