Category: File Fuel Tax IFTA

What Is the IFTA Fuel Tax Agreement? A Complete Guide for Truckers

IFTA Fuel Tax Agreement

Fuel taxes play a crucial role in the trucking industry, especially for carriers operating across state or provincial lines. Every time a trucker purchases fuel, a portion of that cost includes state or provincial taxes meant to support infrastructure like highways, roads, and bridges. However, since many trucking operations span multiple jurisdictions, determining where those taxes should go becomes complicated.

That’s where the International Fuel Tax Agreement (IFTA) comes in. Before IFTA was implemented, truckers had to obtain permits and file separate fuel tax reports for each state or province they operated in—leading to mountains of paperwork, duplicate filings, and widespread confusion.

IFTA was designed to fix that. It simplifies the process by allowing truckers to file a single quarterly fuel tax report with their base jurisdiction, which then distributes the tax funds appropriately to other jurisdictions where fuel was used. This agreement helps ensure fair taxation, reduces administrative hassle, and promotes compliance.

In this guide, we’ll break down exactly what the IFTA fuel tax agreement is, who it applies to, how it works, and how truckers can stay compliant while avoiding costly mistakes.

Whether you’re an owner-operator, part of a small fleet, or managing a large operation, understanding IFTA is essential for smooth and legal interstate trucking operations.

What Is the IFTA Fuel Tax Agreement?

The International Fuel Tax Agreement is a cooperative agreement among the lower 48 U.S. states and 10 Canadian provinces. It was created to simplify the process of reporting and paying fuel taxes for interstate and interprovincial motor carriers.

History and Background

Before IFTA, truckers who traveled across state or provincial borders faced a major compliance headache. They were required to obtain separate fuel tax permits for each jurisdiction they entered and file individual reports based on where fuel was purchased and used. This not only created confusion and inconsistent tax collection but also put a heavy administrative burden on carriers.

Recognizing the need for a more efficient system, a group of U.S. states and Canadian provinces began working together in the 1980s to create a standardized method of fuel tax reporting. The result was the formation of IFTA, which officially launched in 1996 as the standard fuel tax agreement for nearly all of North America.

Purpose of IFTA

The main goal of IFTA is to streamline fuel tax reporting for commercial carriers operating in more than one jurisdiction. Rather than filing multiple reports and managing a patchwork of permits, a motor carrier only needs to:

  • Register and license in their base jurisdiction (where their business is based or operates most).
  • File one quarterly fuel tax return that covers all miles driven and fuel purchased in IFTA member jurisdictions.
  • Let their base jurisdiction handle tax redistribution to other states or provinces based on the data reported.

This ensures that each jurisdiction receives its fair share of fuel tax revenue based on actual fuel usage within its borders—regardless of where the fuel was purchased.

Member Jurisdictions

As of today, IFTA includes:

  • 48 U.S. states (all except Alaska and Hawaii)
  • 10 Canadian provinces
    (Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan)

Note: U.S. territories like Puerto Rico and Canadian territories such as Yukon, Nunavut, and Northwest Territories are not part of IFTA.

Here’s a quick reference list of the U.S. states and Canadian provinces that participate in IFTA:

Participating U.S. States:

All states except:

  • Alaska
  • Hawaii

Participating Canadian Provinces:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland and Labrador
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

By creating a unified system for reporting and paying fuel taxes, IFTA has dramatically reduced the red tape and costs associated with multi-jurisdictional trucking, benefiting both motor carriers and tax authorities alike.

Who Is Required to Comply with IFTA?

Not every vehicle or business that drives across state or provincial lines is required to register under the IFTA fuel tax agreement. The rules apply specifically to commercial carriers that meet certain criteria. Understanding whether your vehicle qualifies—and whether you’re required to file—is the first step toward staying compliant.

Definition of a “Qualified Motor Vehicle”

A qualified motor vehicle under IFTA is defined as a motor vehicle used, designed, or maintained for the transportation of persons or property and that:

  • Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds (11,797 kilograms), OR
  • Has three or more axles, regardless of weight, OR
  • Is used in combination when the combined weight exceeds 26,000 pounds (11,797 kilograms)

Examples include:

  • Heavy-duty semi-trucks and tractor-trailers
  • Straight trucks with three or more axles
  • Trucks hauling large trailers (combination vehicles)

NOT included under IFTA:

  • Light-duty pickup trucks, vans, or cars
  • Personal-use vehicles, even if used occasionally for business
  • Farm vehicles (in some cases, depending on the state/province)

Types of Carriers and Businesses That Need to Register

Any business or individual that operates qualified motor vehicles across state or provincial borders is generally required to register for IFTA and file quarterly fuel tax reports. This includes:

  • Owner-operators operating under their own authority
  • For-hire carriers transporting goods for customers
  • Private fleets hauling company-owned goods
  • Rental and leasing companies with long-term commercial truck rentals
  • Logistics providers and freight brokers with fleet operations

If you’re based in an IFTA jurisdiction and run trips into other IFTA jurisdictions, you’re likely subject to IFTA requirements.

Exceptions and Special Cases

While most interstate commercial carriers with qualified vehicles must comply with IFTA, there are some exceptions and unique cases:

Exceptions:

  • Recreational Vehicles (RVs): Even if they meet the weight threshold, RVs used for personal travel are not subject to IFTA.
  • Farm Vehicles: Some jurisdictions exempt farm-plated vehicles from IFTA reporting when used for agricultural purposes (check local rules).
  • Intrastate Only: If your vehicle operates only within one state or province, you are not required to register for IFTA—even if the vehicle is over 26,000 lbs.
  • Temporary Permits: If a carrier occasionally travels outside its home jurisdiction but doesn’t want to register for IFTA, it can purchase a temporary fuel trip permit for each trip. These are typically valid for 3–10 days and allow legal operation without IFTA registration.

Special Note for Leasing Companies:

Leased vehicles can present unique scenarios. Generally, the party responsible for fuel tax reporting (either the lessor or lessee) must be clearly defined in the lease agreement. Whoever is responsible must handle IFTA licensing and reporting.

If your commercial vehicle fits the definition of a qualified motor vehicle and you cross into other IFTA jurisdictions, you must comply with IFTA by registering and filing regular fuel tax reports through your base jurisdiction.

How the IFTA Fuel Tax Agreement Works

Once you’re registered under IFTA, the process of tracking, filing, and paying fuel taxes becomes much more streamlined—even though you’re operating across multiple states or provinces. This section breaks down the entire workflow so you know exactly what to expect.

Licensing and Decals: How to Register and What You Receive

The first step to complying with IFTA is obtaining an IFTA license through your base jurisdiction. This is the state or province where your business is legally based and where your qualified motor vehicles are registered. You’ll need to provide details like your business name, address, federal EIN, and a list of the vehicles that will be covered under the license.

Once your application is approved, you’ll receive an IFTA license, which must be kept in the cab of each qualified vehicle. You’ll also get two IFTA decals per vehicle, which need to be displayed on both sides of the truck’s cab. These decals serve as visual proof that you are compliant with IFTA regulations.

It’s important to note that IFTA licenses and decals must be renewed annually, usually by the end of the calendar year.

Quarterly Fuel Tax Reporting Requirements

IFTA requires all registered carriers to file a fuel tax return every three months, even if no travel or fuel purchases occurred during that period. This is known as a “zero return,” and skipping it can still result in penalties.

Each quarter, you must report the total miles your vehicles traveled and the amount of fuel purchased across all IFTA jurisdictions. The purpose of this return is to determine how much tax is owed to—or refunded from—each jurisdiction based on where the fuel was consumed versus where it was purchased.

These returns must be submitted on time every quarter. Missing the deadline, even by a day, can lead to interest charges, late fees, or suspension of your IFTA license.

Calculating Miles and Fuel Use Per Jurisdiction

Accurate recordkeeping is the foundation of IFTA compliance. You’ll need to maintain detailed records of:

  • All miles traveled in each state or province
  • All gallons or liters of fuel purchased (with receipts)
  • The location of each fuel purchase
  • Trip sheets or GPS data to validate mileage

Once you have this information, you can calculate your miles per gallon (MPG) for the quarter. For example, if your fleet traveled 12,000 miles and used 1,200 gallons of fuel, your average MPG would be 10.

Next, you’ll determine how much fuel was “used” in each jurisdiction based on the miles driven there and your fleet’s MPG. Then compare that number with how much fuel was actually purchased in that jurisdiction. If you used more fuel than you bought in a specific area, you’ll owe tax. If you bought more than you used, you may be eligible for a credit.

This calculation is repeated for every IFTA jurisdiction you operated in during the quarter.

How Taxes Are Paid and Distributed

Once your return is complete and submitted, you either make a payment if you owe taxes, or you receive a refund if you overpaid. The beauty of IFTA is that you only deal with your base jurisdiction—you don’t have to file separate reports or make payments to each state or province.

Your base jurisdiction takes the full payment (or issues the full refund) and then distributes the correct amounts to the other jurisdictions based on the information in your return. This centralized system ensures that each state or province gets its fair share of fuel tax revenue, without adding extra work for the carrier.

IFTA works by simplifying multi-jurisdiction fuel tax reporting into a single, manageable system. From one license and a set of decals to quarterly reports and centralized payments, it’s designed to reduce the paperwork burden and keep carriers focused on what they do best—keeping freight moving.

IFTA Filing Requirements and Deadlines

Complying with IFTA isn’t just about registering and displaying your decals—timely and accurate reporting is at the heart of the agreement. Every quarter, carriers must submit detailed fuel tax reports to stay compliant and avoid penalties. This section covers everything you need to know about filing requirements, deadlines, and how to make the process easier.

Reporting Frequency (Quarterly)

IFTA requires license holders to file quarterly fuel tax returns, regardless of how much (or how little) activity took place during the reporting period. Even if no miles were traveled or no fuel was purchased during the quarter, a zero return must still be filed to maintain compliance.

Each IFTA return captures data on:

  • Total miles driven in all jurisdictions
  • Miles driven per jurisdiction
  • Total fuel purchased
  • Fuel purchases per jurisdiction
  • Calculated MPG or KPL for your fleet

The return is filed through your base jurisdiction, which consolidates your data and redistributes the taxes owed to each participating IFTA member.

Due Dates for Each Quarter

Returns must be submitted by the end of the month following the close of each quarter. The four reporting quarters and their respective filing deadlines are:

  • First Quarter (January – March): Due by April 30
  • Second Quarter (April – June): Due by July 31
  • Third Quarter (July – September): Due by October 31
  • Fourth Quarter (October – December): Due by January 31

If the due date falls on a weekend or a holiday, the deadline typically extends to the next business day. Failing to file on time—even if it’s just a zero return—can lead to late fees, interest charges, and suspension of your IFTA license.

Required Records: Fuel Receipts, Mileage Logs, Trip Sheets

To complete your IFTA return accurately, you need to keep detailed and organized records for each qualified vehicle in your fleet. These records must be retained for at least four years in case of an IFTA audit.

Here are the key records you’ll need:

Fuel Receipts

  • Must include the date of purchase, seller’s name and address, number of gallons or liters, fuel type, and price
  • Only valid if the purchase was made using a valid payment method in the carrier’s name

Mileage Logs / Trip Sheets

  • Should document each trip taken by a vehicle
  • Must include starting and ending odometer readings, route taken, total miles per trip, and miles driven in each jurisdiction
  • Acceptable formats include handwritten logs, printed reports, or electronic data from an ELD or GPS system

Distance Summaries

  • Total miles driven by the fleet in all jurisdictions
  • Summary by vehicle and jurisdiction is required for calculating MPG/KPL and tax liability

Keeping accurate and up-to-date records helps ensure you report correctly and avoid audits or penalties.

Electronic Filing Options and Software

Manually calculating and filing IFTA returns can be tedious and error-prone—especially for fleets that operate in multiple states or provinces. That’s why many carriers turn to electronic filing systems and IFTA-compliant software to simplify the process.

ExpressTruckTax, for example, offers a user-friendly platform that helps carriers:

  • Import mileage and fuel data quickly
  • Generate accurate IFTA returns with built-in tax rate updates
  • Store historical data and receipts securely
  • Get reminders about upcoming deadlines
  • File returns electronically in just minutes

These tools reduce the risk of errors and save time, especially when integrated with GPS systems, fuel cards, or fleet management software. For larger fleets or those working with tax professionals, bulk upload features and automated calculations are especially valuable.

Staying compliant with IFTA means understanding the reporting schedule, keeping precise records, and leveraging technology to make filing fast, easy, and accurate. A missed deadline or missing receipt might seem small, but it can lead to big headaches down the road—so staying organized is key.

You Asked, We Answered: 6 Popular IFTA Questions

Any time when taxes are involved things can get confusing. You have to when deadlines are, what materials are required to file, how to file, and more. With the 3rd quarter IFTA deadline quickly approaching on October 31st, we, the truck tax experts at ExpressTruckTax, decided to take it upon ourselves to be your resource guide, by answering common IFTA questions.

Popular IFTA Questions

When is IFTA Due?

IFTA is actually due four times a year, which is why your IFTA report is commonly referred to as your ‘quarterly IFTA report’. The IFTA deadlines are as follows:

1st Quarter – April 30th
2nd Quarter – July 31st
3rd Quarter – October 31st
4th Quarter – January 31st

It just so happens that this year the 1st quarter IFTA deadline falls on a weekend, Sunday, April 30th,  and when IFTA deadlines are on a weekend or federal holiday they’re pushed back to the next business day.

2. What exactly is IFTA?

IFTA is the International Fuel Tax Agreement and it is an agreement with the 48 contiguous states in the US and 10 Canadian provinces that’s designed to simplify the fuel use reporting for qualifying motor carriers that operate in more than one jurisdiction (state).

Now you may be wondering what a qualifying motor vehicle is, so we will clear that up. A qualify motor vehicle is vehicle or combination of vehicles that are designed, used, or maintained for the transportation of property of people that have two axles and a gross vehicle weight over 26,000 pounds, two axles and a registered weight exceeding 26,000 pounds, three or more axles regardless of weight, or a combination weight exceeding 26,000 pounds.

3. I rarely travel outside of my jurisdiction, do I need an IFTA license?

You don’t necessarily need an IFTA permit, but you will need a temporary fuel permit, which allows qualifying vehicles without IFTA credentials to temporarily travel in their intended state. To get your temporary permit contact a DMV in the state you will be traveling in. You will need to provide them with information such as your VIN, vehicle model, and more.

Each state has their own temporary trip permit regulations. Some offer temporary permits with varying prices and lengths of time, so you may purchase the one the best suits your travel needs.

4. How do I prove that I Filed my IFTA Report?

You will receive a copy of your IFTA license on an annual basis as long as you file your quarterly reports. Keep a copy of your license in your office and in your qualifying vehicles at all times.

Also, you will have two IFTA decals to display on your truck. It’s best to keep them clearly displayed under the window on your driver door.

When you travel without your IFTA license or decals, you will be subject to receiving a fine and you may have to purchase a temporary permit, or both.

5. What Happens if my IFTA Return is Late?

If your IFTA Return is late, or you fail to file, your base jurisdiction may give you a penalty of $50 or 10% of the taxes owed, depending on which is greater. Also, your base jurisdiction reserves the right to impose additional penalties based on their laws.

Plus, your base jurisdiction will assess the amount of unpaid taxes you owe to each jurisdiction and interest will accrue on that amount at a rate of 1% per month.

6. What do I Need to Complete my IFTA Report?

You will need the following information to complete your IFTA return:

The total miles taxable and nontaxable, traveled by all the licensee’s qualified motor vehicles per jurisdiction. This includes IFTA and non-IFTA miles, and trip permit miles.

The total gallons of fuel consumed by the licensee’s qualified motor vehicles per jurisdiction, including taxable and nontaxable, IFTA, and non-IFTA.

The taxable gallons used and purchased per jurisdiction.

And the current tax rate per jurisdiction.

Do You Have More Questions?

Well then ask us! We’re IFTA experts, and we’re here to help. Feel free to contact our dedicated support team with any questions that you may have. We’re available Monday – Friday from 9 AM to 6 PM EST at 704.234.6005. We’re also available via live chat and offer 24/7 email support at support@expresstrucktax.com

IFTA (International Fuel Tax Agreement) Information

Owners of qualified heavy highway motor vehicles that operate in at least 2 out of the 58 total jurisdictions must file IFTA on a quarterly basis. The abbreviation: “IFTA” is short for International Fuel Tax Agreement, which represents a tax collection agreement among the 48 contiguous United States and its 10 bordering Canadian Provinces.
Qualifying Highway Motor Vehicles
Any vehicle is considered to be a qualified motor vehicle if it is used, designed, or maintained for the purpose of transportation of persons or property and has a registered gross vehicle weight of more than 26,000 pounds. Also, any vehicle with 3 axles or more is considered to be a qualified motor vehicle regardless of weight. Finally, if the combined weight of all of its parts is greater than 26,000 pounds, it is also considered to be a qualified motor vehicle.
IFTA Process
Each state or province has a different rate and those rates can change each quarter. The state or province in which the vehicle is registered is considered to be its Base Jurisdiction. IFTA must be filed with the vehicle’s respective jurisdiction each quarter. Every driver must keep a trip log of how many miles are traveled in each state or province, as well as how much fuel was purchased in each state or province. This information can be kept on what are commonly referred to as trip sheets, or trip logs.
Reasons for IFTA
IFTA’s official purpose according to the International Fuel Tax Agreement, is “to promote and encourage the fullest and most efficient possible use of the highway system by making uniform the administration of motor fuels use taxation laws with respect to qualified member vehicles operated in multiple member jurisdictions.” When an IFTA form is filed with the appropriate jurisdiction, The Fuel Tax Report is then used to determine the tax amount due as well as the refund due. It is also used for redistributing collections from the jurisdictions that received IFTA payments, and the jurisdictions that deserved some. One of the reasons for the Fuel Tax is to ensure that a vehicle pays taxes to all deserving jurisdictions. For Example: if a vehicle travels through a state, but buys no gas while in that state, then there was no fuel tax paid to that state through the purchase of gasoline. Part of their tax would then be redistributed to the state that received no fuel tax through the purchase of gasoline.
Get IFTA Organized
Since the data required to file IFTA is so incredibly detailed, many people receive Audits of their IFTA information. The sadness of this is that this can be prevented by better record keeping. Express Truck Tax, along with providing a terrific service for other Truck Tax needs, will perform an internal audit of your IFTA information for you. In this internal audit performed by Express Truck Tax, it will check for basic mistakes and discrepancies, as well as perform a state adjacency check and an abnormal MPG audit. They also provide online trip sheets for drivers to keep accurate records that can be accessed from any computer, anywhere! If you can prevent an audit due to simple mistakes on an IFTA return, it makes no sense not to let Express Truck Tax help you get it right the first time.