Highway use fuel use tax IFTA

You may think that you can estimate your fleet’s average number of miles per gallon and the average number of miles traveled. However, estimating such important details can be a very costly mistake. Drivers pay taxes at the pump, which are then dispersed to each state. The taxes are calculated and distributed based on the miles that the vehicle is driven in each state.

The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily reflect the views of the Administration for Children and Families and the Office of Child Support Services. IFTA, Inc. sets the interest rate each year at 2% above the IRS underpayment rate. If a service agent manages your account and you want to remove their access, you must submit a written request by email, mail, or through License Express. If you’re getting a new agent, you’ll also need a new power of attorney (POA) for them. We’ll make the change and your account on License Express will reflect this or we’ll call you. Use one of the addresses below depending on whether you’re including a payment with your return.

Credits & Deductions

The first thing you’ll want to do is keep track of every individual trip your truck went on. For audit purposes, you would want to also keep track of your starting and ending odometer reading for each trip. Let’s start with the traditional and most time consuming method. Get out your pen, paper, and calculator – we’re going to be adding up a lot of numbers. 50+ years of combined experience, blending the fuel industry’s best practices with cutting-edge tech to provide superior fuel delivery service to our customers across a variety of industries. Order from Fuel Logic today and we’ll deliver high-quality fuel to your location at competitive prices.

• Regardless, you now have all the information required to make that process hassle free.
• 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.
• 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).
• Carriers no longer have to register for every state or providence that they drive in throughout the year.

Step 3 – Calculating IFTA Fuel Tax Paid & Owed

As a result, you will have a mileage number for each time your truck entered a new state. You will need to keep track of how many miles were traveled in each state or province. Therefore, they raise the prices of their products or services to cover these operating expenses.

Q2: How much is the federal tax on a gallon of gasoline?

Yes, you can access previous reports if you have the generated report link. In future updates, we’ll also introduce a History report feature. Export ready-to-file IFTA reports — without any errors and inconsistencies — with a several clicks. If you do not file by these timelines, you’ll run the risk of being fined, so it’s best to stay organized and on top of your filings.

Gas Tax Rates by State, 2023

• Every vehicle that belongs to you as a motor carrier is required to apply for or renew an annual IFTA license.
• To do this, add up all the miles traveled from every state for the quarter – this number will be used in the next step of the process.
• 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.
• Now, for each corresponding entry and exit for a particular state or province, make sure you subtract the ending odometer reading from the entry reading.
• Interest is not earned from a jurisdiction on delinquent tax returns.

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 my fuel tax should you want to give it at try.

Depending on your state, you may either have an online IFTA filing portal, or you may be required to do a paper filing. 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. Now that you have your Fuel Mileage, you can calculate how much fuel you’ve burnt in each state. As with all our trucking and fleet management solutions, Switchboard’s mission is to make things easier.

In contrast, Alaska had one of the lowest rates, with just $0.0895 per gallon for both gas and diesel. Calculating IFTA is among the most time consuming and tedious tasks that you will do as a fleet manager or individual truck driver – especially if you are still using paper logs. Whether it’s your first time filing an IFTA report or your 50th, we’re here to show you the easiest way to file your fuel tax return – with or without an automated IFTA mileage calculator. The federal and state governments formulate and amend fuel tax policies. The federal government imposes a standard tax that remains the same in all states, while state taxes vary in different states.

Construction and Landscaping Enhance Environmental Practices

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 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.

The transportation industry ships goods and cargo all over the country. Because many of the companies that operate trucks transport across the country as a whole or simply to a specific geographical region, it can be difficult to determine which state to register as your base. In order to be successful with your IFTA reporting, consider the following tips that can help you better understand the process. Understanding IFTA reporting is important for all drivers and owner-operators. IFTA stands for International Fuel Tax Agreements, and its intended purpose is to save fleets money, although it can be confusing. Persons exempt from the fee must request in writing a letter of exemption from the Comptroller.