How the IFTA calculation works
IFTA does not tax the fuel where you buy it. It taxes the fuel you burn in each jurisdiction, then gives you credit for the tax you already paid at the pump. Every quarterly return follows the same five steps:
- Fleet MPG. Total miles in all jurisdictions divided by total gallons bought:
MPG = total miles ÷ total gallons. - Taxable gallons per jurisdiction:
miles in the state ÷ MPG. This is the fuel you are treated as having burned there. - Net taxable gallons:
taxable gallons − tax-paid gallons bought there. Negative means you bought more than you burned. - Tax:
net taxable gallons × the state's rate. A negative number is a credit. - Surcharge (Kentucky and Virginia; Indiana's is currently $0):
taxable gallons × surcharge rate. It applies to every gallon burned, and fuel bought in the state does not reduce it.
The credits and amounts due from every jurisdiction are netted on one return to your base jurisdiction, which pays the other states for you.
Worked example with 3rd quarter 2026 rates
A truck runs 10,000 miles in the 3rd quarter 2026: 6,000 in Texas and 4,000 in Oklahoma. It buys 900 gallons of diesel in Texas and 350 in Oklahoma, 1,250 in all. Fleet MPG is 10,000 ÷ 1,250 = 8.00.
| State | Miles | Taxable gal | Bought gal | Net gal | Rate | Tax |
|---|---|---|---|---|---|---|
| Texas | 6,000 | 750 | 900 | -150 | $0.2000 | −$30.00 credit |
| Oklahoma | 4,000 | 500 | 350 | +150 | $0.1900 | $28.50 due |
150 gallons were bought in Texas but burned in Oklahoma. You get a credit for the Texas tax already paid on them and owe Oklahoma tax on the same gallons, so the two lines nearly cancel. Net on the return: −$1.50 credit — the gap between the Texas rate ($0.2000) and the Oklahoma rate ($0.1900) on those 150 gallons.
Who has to file IFTA?
You need an IFTA license and quarterly returns if you run a qualified motor vehicle in two or more member jurisdictions. A qualified motor vehicle has:
- two axles and a gross vehicle weight or registered gross weight over 26,000 lb (11,797 kg), or
- three or more axles, at any weight, or
- a combination weighing over 26,000 lb.
Recreational vehicles are excluded. Trucks that never leave the base state don't need IFTA; occasional trips can be covered with trip permits instead. IFTA Articles of Agreement R245
Common IFTA mistakes
- Miles from a route planner instead of the truck's actual ELD or GPS miles. Auditors compare reported miles with trip records and fuel receipts.
- Missing receipts. No receipt means no tax-paid credit for those gallons — you pay the tax again.
- Skipping a quarter with no miles. A return is still due, and a late one costs $50 or 10% of the tax, whichever is greater.
- Mixing fuel types. Diesel, gasoline and other fuels are reported separately, each with its own MPG and rates.
- Throwing records away too early. Keep trip records and receipts for 4 years from the due date or filing date, whichever is later. IFTA Procedures Manual P510
IFTA filing deadlines full calendar →
Returns are due on the last day of the month after the quarter ends. When that day falls on a weekend or legal holiday, the return is due on the next business day.
| Quarter | Period | Due |
|---|---|---|
| 3rd quarter 2026 | Jul 1 – Sep 30 | Nov 2, 2026 (Oct 31 is a Saturday) |
| 4th quarter 2026 | Oct 1 – Dec 31 | Feb 1, 2027 (Jan 31 is a Sunday) |
| 1st quarter 2027 | Jan 1 – Mar 31 | Apr 30, 2027 |
| 2nd quarter 2027 | Apr 1 – Jun 30 | Aug 2, 2027 (Jul 31 is a Saturday) |
You file a return every quarter even if you did not drive, and a late return usually costs a $50 penalty or 10% of the net tax due, whichever is greater, plus interest.
What counts as a mile?
Every mile a qualified motor vehicle travels in a member jurisdiction, loaded or empty, including deadhead and bobtail. Most carriers take jurisdiction miles from their ELD or GPS trip records; keep them, because an audit compares them against your fuel receipts.
Which gallons are tax-paid?
Fuel bought at a retail pump normally includes state fuel tax, so it counts. Bulk fuel from your own tank counts only if the tax was paid on delivery. Keep every receipt: it must show the date, seller, gallons, fuel type and unit number.
Why does Oregon show $0?
Oregon does not tax diesel through IFTA. Heavy trucks there pay a weight-mile tax instead, filed separately with Oregon, so Oregon miles still go on your IFTA return but carry no fuel tax.