How does IFTA work, and what do I do each quarter?
Updated 2026-10-22T00:00:00.000Z. Built with AI assistance and checked with automated tests.
IFTA, the International Fuel Tax Agreement, is an agreement among the member U.S. states and Canadian provinces. It lets a carrier file one fuel tax return each quarter with its home (base) jurisdiction, instead of filing separately in every member jurisdiction it drives through. Not every U.S. state or Canadian province or territory is a member, so confirm which ones apply. You generally report the miles and fuel for each jurisdiction and work out the fuel tax you owe in each one. Then you subtract the fuel tax you already paid at the pump, and you pay the difference or report a credit. The return is generally due by the last day of the month after the quarter ends.
Who it applies to and how it works
IFTA generally applies to qualified motor vehicles used in more than one member jurisdiction. The definition typically depends on weight, number of axles and vehicle type, and a common threshold is a gross vehicle weight over 26,000 pounds. Details vary, so check the definition with your base jurisdiction’s IFTA agency or the official IFTA materials. You generally get a license from your base jurisdiction, which is where you register and keep your records. That agency collects the tax and passes each jurisdiction its share.
The idea is simple: fuel tax should go to the places where you actually drove. You may buy fuel in one jurisdiction and burn most of it in another. IFTA sorts that out on paper at the end of the quarter.
The quarterly steps
1. Total your miles by jurisdiction. For each trip, record the miles driven in each state or province. Add them up for the quarter. Canadian jurisdictions use kilometers and liters, so convert as your base jurisdiction instructs.
2. Total your fuel purchases. Record gallons bought, by jurisdiction, and note whether tax was paid at purchase.
3. Work out fleet MPG. Divide total miles driven in all jurisdictions by total gallons of fuel used, across all your IFTA vehicles. Purchases are commonly used as the record of fuel used, but follow your base jurisdiction’s rules. This is your fleet MPG. It covers the whole fleet for the quarter, not one truck or one trip.
4. Work out taxable gallons for each jurisdiction. Divide the miles driven in that jurisdiction by fleet MPG.
5. Work out tax due. Multiply taxable gallons by that jurisdiction’s tax rate. Rates change, usually at least once a year, so look up the current rates from your base jurisdiction or the official IFTA source. Don’t use a rate you remember.
6. Subtract tax paid. Tax-paid gallons are the tax-paid gallons you bought in that jurisdiction. Net taxable gallons are taxable gallons minus tax-paid gallons. A positive number means you owe that jurisdiction. A negative number means a credit. Add the results across all jurisdictions to get your net amount. Your base jurisdiction determines whether a net credit is refunded or applied to a later return.
Worked example
These are round, made-up numbers for illustration only. They are not real rates.
A small fleet drove 10,000 miles in the quarter and used 1,600 gallons, all bought tax-paid. Fleet MPG is 10,000 ÷ 1,600 = 6.25 MPG.
| Miles | Gallons bought | Taxable gallons (miles ÷ 6.25) | Net taxable gallons | |
|---|---|---|---|---|
| State A | 6,000 | 800 | 960 | +160 |
| State B | 4,000 | 800 | 640 | −160 |
Sample rate: State A at $0.30 per gallon, State B at $0.20 per gallon. These rates are for the example only.
- State A: 160 net gallons × $0.30 = $48.00 owed.
- State B: −160 net gallons × $0.20 = −$32.00 credit.
- Net: $48.00 − $32.00 = $16.00 due.
You bought more fuel in State B than you burned there, so you generally get a credit for the tax you paid at the pump. In State A you drove more than you fueled, so you owe.
Deadlines and records
Returns are generally due by the last day of the month after each quarter ends:
- January through March: April 30
- April through June: July 31
- July through September: October 31
- October through December: January 31
If a date lands on a weekend or holiday, it generally moves to the next business day, but confirm this with your base jurisdiction. Also confirm the exact date and any penalties and interest for late filing.
Records generally need to support every number on the return. Typically that means trip records with dates and routes, odometer or distance readings by jurisdiction, and fuel receipts showing date, seller, gallons, fuel type, price and the vehicle. IFTA generally calls for keeping records for at least four years, but confirm the retention period with your base jurisdiction. Keep them organized by quarter in case of an audit.
Common mistakes
- Using one truck’s MPG instead of fleet MPG.
- Not filing when you had no activity or no tax due. A return is generally still required for each quarter while you hold a license, so confirm with your base jurisdiction.
- Using old tax rates.
- Missing fuel receipts, which can mean you can’t claim that fuel as tax paid.
- Counting miles in the wrong jurisdiction, or leaving out off-route miles.
- Waiting until the deadline to total the quarter.
This guide explains the concepts only and is not tax, legal or financial advice. For your situation, confirm details with your base jurisdiction’s IFTA agency or a qualified tax professional.