What is IFTA?

The International Fuel Tax Agreement (IFTA) is an agreement between the lower 48 US states and Canadian provinces to simplify fuel tax reporting for motor carriers operating in multiple jurisdictions. Instead of filing separately with each state, you file one quarterly report with your base jurisdiction.

Step 1: Calculate Your Fleet MPG

Your fleet's average miles per gallon (MPG) is the foundation of IFTA calculations. It determines how many gallons of fuel you're assumed to have used in each jurisdiction.

For example, if you traveled 10,000 miles and purchased 1,250 gallons of fuel, your fleet MPG would be 8.0 MPG.

Step 2: Calculate Taxable Gallons by State

For each jurisdiction you traveled through, calculate the taxable gallons based on the miles driven in that state and your fleet MPG.

If you drove 2,000 miles in Texas with a fleet MPG of 8.0, your taxable gallons for Texas would be 250 gallons.

Step 3: Apply Tax-Paid Credits

When you purchase fuel in a state, you pay that state's fuel tax at the pump. This creates a tax credit that reduces what you owe to that jurisdiction.

• Positive result: You owe additional tax to that jurisdiction

• Negative result: You receive a credit from that jurisdiction

Step 4: Calculate Tax Due/Credit

Multiply the net taxable gallons by each jurisdiction's current tax rate to determine your tax liability or credit.

Tax rates vary by jurisdiction and fuel type (diesel vs. gasoline). Always use the current quarter's rates for your calculations.

Example Calculation

Let's walk through a complete example:

In this example, you would receive a $5.00 credit from Texas because you purchased more fuel there than you consumed.