Highway use fuel use tax IFTA

Every vehicle that belongs to you as a motor carrier is required to apply for or renew an annual IFTA license. After your application is approved, you’ll receive two decals to validate your IFTA license that are to be placed on your vehicle’s door. The IFTA is a pact between the contiguous U.S. and 10 Canadian provinces. Before IFTA, trucks had to have purchased a fuel permit for every state they operated in, which was a hassle and a lot of paperwork. The process cuts down on the paperwork and minimizes compliance requirements.

The first federal gasoline tax in the United States was created on June 6, 1932, with the enactment of the Revenue Act of 1932, which taxed 1¢/gal (0.3¢/L). Since 1993, the US federal gasoline tax has been unchanged (and not adjusted for inflation of nearly 113 percent through 2023) at 18.4¢/gal (4.86¢/L). By 1939, many states levied an average fuel tax of 3.8¢/gal (1¢/L). Our innovative IFTA TAX Calculator serves as your reliable guide, simplifying the process of calculations.

Filing IFTA tax returns

You must submit your tax returns according to the dates in the chart below. The License Express for prorate and fuel tax online system is an easier and faster way to manage your fuel tax accounts. To calculate the tax required for each state/province, you will need to look at the tax rate for that region. Record the mileage for each state/province individually on a spreadsheet, as you’ll need to add all miles traveled for a particular state across all your trips. Once you have organized the information from all your trips in the 3 month reporting quarter, we’re ready for the next step. You would add up the mileage for each entrance, resulting in a total of 3654 miles in Washington for this reporting quarter.

Biodiesel Fuel and Renewable Diesel Fuel

Consumers pay different amounts in taxes depending on their state’s tax rates. The tax imposed on fuel by the federal government is known as the federal fuel tax. In the U.S., the federal gas tax is about 18.3 cents per gallon and the federal tax on diesel fuel is 24.3 cents. The federal government uses these taxes to fund transportation-related projects, such as highway and bridge construction. A licensee may include the travel and gallons consumed of qualified motor vehicles that operate exclusively within a jurisdiction by obtaining IFTA decals for the intrajurisdictional vehicle(s). Once decaled, the intrajurisdictional vehicle(s) must continue to be reported until either the expiration date of the decal or the vehicle(s) are no longer under the control of the licensee.

Federal tax revenues

For example, a trip originating in Arkansas, traveling through Texas to New Mexico, and then the return trip to Arkansas would require the purchase of two Texas trip permits. If a licensee is registered in more than one jurisdiction, it can reduce the my fuel tax number of jurisdiction registrations to one state. However, each affected jurisdiction must approve the consolidation. This website is supported by Grant Number 2501FLSCSS from the Office of Child Support Services within the Administration for Children and Families, a division of the U.S.

Its user-friendly interface and precise guarantee accurate fuel tax calculations, fully aligned with IFTA regulations. Another IFTA requirement is that you record all of the miles you’ve driven, including your personal mileage. Make sure you are reporting every mile that you drive, which includes the mileage put towards personal errands, loading, and unloading. The mileage gaps will raise a red flag in your driving trips if every mile is not recorded, even for personal use.

Why Our IFTA Tax Calculator Is The Reliable Solution For Trucking Companies

Fuel taxes are paid to the jurisdictions in which mileage is incurred, (based on the fleet’s miles per gallon), even if fuel is purchased in a different jurisdiction. The amount of fuel tax paid to a given jurisdiction depends on the fuel tax rate in place in the jurisdiction in which mileage occurs. The payment of fuel tax is accomplished through a quarterly tax report (the IFTA Quarterly Tax Report).

• All you have to do is add together the Fuel Tax Owed we just calculated for all states, and including any negative values from there.
• Carriers no longer have to register for every state or providence that they drive in throughout the year.
• Economic conditions like inflation, fuel prices, and recessions can impact fuel tax rates.
• If the vehicle, when traveling in combination, meets the IFTA weight requirement, it is considered a qualified motor vehicle (combination means both the two-axle vehicle and the trailing unit).
• You may copy the license and place it in each vehicle operating under that license.

• Elevate your fuel tax reporting process with IFTA Tax Calculator.
• A carrier with fleets registered in more than one state may request to have its fleet consolidated to one base jurisdiction, regardless of which state’s license plate is displayed.
• The American Petroleum Institute uses a weighted average of local taxes by municipality population to create an average tax for the entire state.
• Many northeastern states participate in the Regional Greenhouse Gas Initiative, a regional cap on emissions from power plants.
• The state tax on gas is 68.1 cents per gallon, and on diesel, it’s 92.12 cents, which is the highest in the U.S.

Because many states with the highest taxes also have higher populations, more states (i.e., the less populated ones) have below-average taxes than above-average taxes. The International Fuel Tax Agreement (IFTA) is an arrangement between the contiguous U.S. and the 10 Canadian provinces that allow motor carriers to register their fuel usage in one state. It also permits them to have tax assessments paid to the areas in which they drive, according to their fair share. Carriers no longer have to register for every state or providence that they drive in throughout the year.

My Fuel Tax

Each state’s local legislation, transportation budgets, and infrastructure requirements differ, so tax rates are set accordingly. If a state needs more capital to fix its infrastructure and transit projects, the fuel taxes are higher there. For example, the state fuel tax in California is 69.8 cents per gallon, while in Alaska, it’s 9.0 cents per gallon in July 2024. The purpose of collecting fuel taxes is to fund highway repairs, maintenance, and other government infrastructure projects.

A carrier with fleets registered in more than one state may request to have its fleet consolidated to one base jurisdiction, regardless of which state’s license plate is displayed. This notice reflects the best information available to the Department as of the date it was issued. It is the responsibility of the taxpayer to have knowledge of and pay the proper fuel tax according to state law. Learn how to file IFTA tax returns with instructions and helpful resources. If you want to save time and simplify your own IFTA reporting process, make sure to request a demo of our IFTA Automation solution, and our team will get you set up with a free trial should you want to give it at try.

Tips for IFTA reporting

You can also retrieve copies of any tax return previously filed. Fuel taxes are distributed to states and provinces based on the number of miles that a motor carrier traveled in that state or province. Read on to discover the factors influencing fuel taxes and how these taxes affect various industries and businesses. When we average total state taxes across the U.S., they pay approximately 32.61 cents per gallon on gasoline and 34.76 cents per gallon on diesel. Read our Biodiesel Fuel and Renewable Diesel Fuel FAQs to learn how to report biodiesel fuel on your IFTA quarterly return. When incorporating state environmental programs and taxes into gas tax rates, the range of gas tax rates across the country becomes even wider.