International Fuel Tax Agreement

IFTA is an agreement between the U.S. and Canada to collect fuel use tax.

This includes 48 states and 10 Canadian provinces. A IFTA license is not required if
you never leave your base state.

You pay fuel tax at the pump so collecting tax is a non issue if you never leave your home state.

IFTA makes sure each state gets their share of the tax if you travel between states even if you do not buy fuel
in that state. You must apply annually for a license and decals if you operate a commercial vehicle in two or more jurisdictions and,

  • GVW is greater than 26,000 lbs.
  • Three or more axles regardless of weight.
  • When used in combination with a trailer and the combined GVW is greater than 26,000 lbs.

IFTA fuel tax calculations are based on two factors. Distance and Fuel Purchases.
A valid fuel receipt is required in order to claim credits on returns.

Returns are filed with your base jurisdiction quarterly.
Fuel tax owed is calculated based on where you consume the fuel.

Tax credit is determined by where you purchased the fuel
IFTA nets the difference between fuel consumed and fuel purchased for
each jurisdiction.

IFTA Fuel Tax Sample

State Fuel Consumed Fuel Purchased Fuel
State Gallons Gallons DR/CR
1 183 0 183
2 116 200 (84)
3 94 0 94
4 7 200 (193)
Total 400 400 ---

IFTA is on the honor system. Jurisdictions audit about 3% of their carriers per
year. Typically any vehicle that is IFTA is apportioned, but not always.

IFTA allows either lessee or lessor to report IFTA. Apportioned distance
belongs to the plate owner. Owner/Operators: Who is reporting the IFTA