International Fuel Tax Agreement (IFTA)

Forty-seven of the forty-eight contiguous states require interstate motor carriers to report how much fuel they use within the borders of their state, and pay fuel taxes based on these reports.  This fuel “use” tax enables a jurisdiction to assess highway user fees on all motor carriers that travel on its roads, not just those that purchase fuel (and pay the tax at the pump) within the state.  In addition to reporting, the motor carrier is also required to register for the tax, sometimes secure a fuel tax bond, and obtain cab cards and external decals for the vehicles, and send quarterly fuel use reports.

Each carrier must maintain a complete record of all fuel purchased and used in its operations, together with detailed mileage records on an individual vehicle basis.  The mileage records must include both taxable and non-taxable usage of fuel: miles traveled for taxable and non-taxable use; and mileage recaps for each vehicle for each jurisdiction in which the vehicle operated.

Please note that a few states have some form of weight-distance tax in addition to the fuel use tax.  These mileage taxes are not reported under IFTA.  Carriers will need to satisfy these taxes with each individual state that retains them.  Currently, five states have such taxes: Arizona, Kentucky, New Mexico, New York and Oregon.