As commercial fleets adopt electric and alternative fuel trucks, states are looking for ways to negate the lost revenue from diesel fuel tax by implementing new taxes under IFTA.
Now, fleet-based organizations with electric vehicles (EVs) and alternative fuel vehicles (AFVs) need to track and report their energy use by jurisdiction (and in some states, pay taxes).
Preparing quarterly IFTA reports is already cumbersome. Organizations need solutions to streamline IFTA fuel tax reporting so they can be prepared to manage these added complexities.
In this article, learn how fuel tax reporting under IFTA is changing, along with strategies fleet-based organizations can use to stay compliant.
What is IFTA?
Before exploring the changes alternative fuel and electric vehicles will bring to IFTA, get a quick refresher on what IFTA is and why it exists:
| What is IFTA? | Who is part of IFTA? | Why was IFTA created? | Who needs to file with IFTA? |
| The International Fuel Tax Agreement | The lower 48 United States and the 10 Canadian provinces (excludes District of Columbia) | Simplifies fuel tax reporting by allowing carriers to file a single quarterly return | Organizations with qualified motor vehicles that operate in two or more different jurisdictions |
Instead of having to get a fuel tax permit, keep records, and file quarterly reports in each state or province where they travel, carriers simply submit one IFTA report to their base jurisdiction. That jurisdiction then manages distributing taxes to or collecting taxes from other jurisdictions.
How are alternative fuels and electrification changing IFTA?
As the fuel landscape changes, IFTA is making changes to adapt.
The most notable IFTA change became effective January 1st, 2026. It expanded the definition of motor fuel so that electricity, hydrogen, and other energy sources could be tracked. IFTA wanted to ensure that no matter how a truck is powered, its use of the road can be measured, tracked, and taxed under IFTA.
Currently, states such as Indiana, Iowa, and Pennsylvania have published IFTA tax rates for electricity and hydrogen, while others like California only require reporting-only filings at this time.
Top takeaway: Even if these states are not a carrier’s base jurisdiction, and even if a carrier does not operate in these jurisdictions, they still must now report alternative fuels, including electricity, on their IFTA returns.
IFTA challenges for fleets with electric and alternative fuel vehicles
As IFTA expands to include EVs and AFVs, organizations have to now manage more operational complexity. They face two major challenges:
- Existing IFTA process is time-consuming
- IFTA reporting becomes more complex with electricity and alternative fuels
Challenge 1. IFTA reporting is already time consuming
Even before you add EVs and alternative fuels, IFTA filing requires organizations to follow a cumbersome process:
- Track all miles driven by each qualified vehicle in every state or province for the entire quarter.
- Record of every fuel purchase — date, location, fuel type, gallons, price per gallon, and tax paid — and tie those back to specific vehicles and jurisdictions.
- Calculate overall MPG, then allocate fuel consumed to each jurisdiction, apply the correct tax rate for that quarter, and reconcile tax paid at the pump versus tax owed.
For organizations with small fleets, this can mean a single person spends days every quarter pulling data from trip sheets, GPS systems, and fuel card statements. As a fleet grows or runs more multi-state routes, that effort can turn into entire teams dedicated just to IFTA.
The more manual the process, the higher the risk of mistakes that can trigger audits, penalties, or rework.
Challenge 2. Adding electricity and alternative fuels makes IFTA reporting more complicated
Reporting electricity and alternative fuels adds another layer of complexity to the IFTA reporting process, and raises new questions for organizations:
- How do you measure “fuel” use for EVs and AFVs? Instead of only considering gallons, organizations now have to think in kilowatt-hours (kWh) or other energy units, and tie that usage back to where the vehicle actually traveled.
- Is the method you use to measure these new fuel types “audit-ready”? IFTA auditors look for complete, verifiable source documentation and a consistent distance-and-fuel accounting method. Whatever approach you use to calculate kWh or alternative fuel volume by jurisdiction has to be something you can document, reproduce, and defend in an audit.
- How do you separate taxable energy from non-taxable? Many organizations mix public charging, depot charging, and onsite generation, or run vehicles on blends like biodiesel or other alternative fuels. Each scenario can have different tax implications under IFTA.
To summarize the biggest challenge for fleet-powered organizations: If you’re traveling through these states with an electric or alternatively-fueled vehicle, how are you tracking the amount of energy used in which jurisdiction, so you can report it accurately?
Without a clear way to meter energy consumption by vehicle and jurisdiction, IFTA reporting for alternative fuels quickly becomes more complex than traditional diesel reporting, not less.
What can fleet-based organizations with EVs and alternative fuel vehicles do to stay IFTA compliant?
As state and province tax policy evolves, organizations should focus on simplifying their current IFTA processes as much as possible. A flexible, modern workflow now will make it much easier to absorb added complexity later.
Adopt these three best practices:
1. Automate IFTA preparation
An IFTA workflow built on paper receipts, email attachments, and spreadsheets will quickly become untenable as electricity and alternative fuels get involved. Even today, that kind of process is slow, error-prone, and hard to replicate for an auditor. Move toward a workflow where distance-by-jurisdiction, fuel purchases, and tax calculations are collected automatically.
Organizations using Motive for IFTA can automatically calculate jurisdictional mileage and then generate reports instead of rebuilding IFTA from scratch every quarter.
As EV and AFV tax rules continue to shift, having that foundation in place is the most reliable way to stay compliant without adding more headcount.
2. Continuously track and report your alternative fuel and EV use
IFTA requirements for electricity and other alternative fuels are still evolving, but it’s clear that organizations will be better off over-tracking than under-tracking. Even jurisdictions like California that aren’t taxing yet still expect accurate numbers on energy use and distance traveled.
The most strategic approach? Track fuel and energy usage by vehicle and jurisdiction no matter what type of fuel you’re using. That way, you have the data you need to either report it or pay taxes on it quarterly.
Motive combines Vehicle Gateway telematics with Motive Card transactions so organizations can see fuel and energy spending by vehicle, jurisdiction, and time period, then create IFTA reports with a few clicks.
3. Work with a provider that can support EVs and AFVs
If you already run or plan to run EVs and AFVs, build IFTA and tax compliance into your vendor selection process. Many legacy tools were designed around diesel only and may struggle to accommodate newer fuel types, charging data, or mixed-fuel fleets.
Look for a provider that can:
- Support both traditional engines and EV and AFV telematics in a single platform.
- Capture the right data for IFTA (distance by jurisdiction, fuel or energy usage, and tax-paid purchases) across all fuel types.
- Evolve as IFTA and state tax codes change.
By choosing a platform like Motive — which already combines telematics, spend data, and IFTA reporting in one place — organizations can keep today’s reporting under control while staying ready for whatever IFTA looks like in an electric, multi-fuel future.
Technical requirements for accurate IFTA reporting for EVs and alternative fuel vehicles
To keep IFTA reporting accurate as fleets electrify, look for software that can handle both traditional fuel and emerging energy types in a single, integrated workflow.
The vendor should provide these features:
- Telematics-based distance by jurisdiction
- Built-in EV and alternative fuel visibility
- Support for multiple fuel and energy units
- Integrated fuel and energy spend data
- Mixed-fleet support in a single workflow
- IFTA-aligned summaries and exports
Telematics-based distance by jurisdiction. Your IFTA solution should use reliable trip and odometer data from a vehicle gateway (not just ad-hoc GPS trips) to calculate how far each qualified vehicle travels in every state or province.
Built-in EV and alternative fuel visibility. Look for software tracks where EVs are, but also records EV-specific details such as charge level, range, and charging status alongside traditional vehicles.
Support for multiple fuel and energy units. A modern platform should handle gallons and liters as well as kWh and other alternative fuel units, and keep them tied to the right vehicle and jurisdiction.
Integrated fuel and energy spend data. To avoid misplaced receipts and files, your IFTA workflow should live where your fuel and energy transactions are.
Mixed-fleet support in a single workflow. As long as a vehicle meets the qualified motor vehicle definition, you shouldn’t need separate tools for traditional, hybrid, and electric trucks. Your IFTA preparation and reporting process should all sit in one workflow.
IFTA-aligned summaries and exports. Your provider should enable report generation in the format IFTA expects — distance and fuel/energy by jurisdiction, vehicle, and fuel type — with clean exports you can file or share with your tax service.
How Motive’s AI-powered platform streamlines IFTA fuel tax calculations and mileage tracking
With Motive, you have a trusted partner to reduce IFTA complexity and improve efficiency. Motive features make it easy to move from a diesel-only fleet to a mixed or fully electric and alternative fuel fleet.
See how these capabilities can help:
| Motive Feature | Benefit |
| Motive’s Vehicle Gateway is designed to feed distance-by-jurisdiction data directly into IFTA reports. | Accuracy |
| Motive brings EVs and AFVs into the same operational view as diesel trucks so they can be included in compliant reporting as rules evolve. | EV readiness |
| Motive supports multiple fuel types in one system so you don’t have to normalize everything in spreadsheets before you report it. | Multi-fuel flexibility |
| Motive combines Vehicle Gateway distance with Motive Card transactions and other imported fuel data so taxable usage and spend are captured in one place for IFTA. | Integrated spend |
| Motive lets organizations manage mixed fuel types in one dashboard and one IFTA workflow, instead of splitting reporting by vehicle type. | Mixed-fleet simplicity |
| Motive’s IFTA Fuel Tax Reporting produces reports in the right format for IFTA, reducing the need for custom spreadsheets or one-off calculations. | Time-saving automation |
Cascade Environmental saved 800 hours per month with Motive
At Cascade Environmental, quarterly IFTA filings meant spending hundreds of driver hours on daily fuel and mileage reporting and admin hours on data entry and reconciliation.
After moving IFTA reporting into Motive — combining Vehicle Gateway distance with Motive Card transactions — Cascade automated trip reporting and IFTA prep. They saved more than 800 hours per month on IFTA reporting alone while also passing an Oregon fuel tax audit with zero data errors when using Motive.
IFTA fuel tax reporting is complicated enough: Use Motive to make it simpler
IFTA was already complex before EVs and alternative fuels entered the picture — and the rules will continue to change. The organizations that stay ahead will be the ones that automate distance, fuel, and energy reporting now so they can adapt quickly as new tax structures roll out.
With Motive’s streamlined IFTA reporting features, your teams can focus on growing the business instead of manually updating spreadsheets.
Get in touch to see how Motive’s IFTA Fuel Tax Reporting can simplify your next quarter, while keeping you prepared for what comes next.
Frequently Asked Questions
How is electricity consumption measured for IFTA purposes?
For IFTA purposes, electricity isn’t measured in “gallons” like diesel; it’s measured in kilowatt-hours (kWh). Gather your vehicle-specific data from three primary sources: Telematics or ELD data, charging station receipts, or private charging.
What challenges exist in tracking mileage for alternative fuel trucks?
Under IFTA, organizations have to capture exact distance by jurisdiction for every qualified vehicle — which now spans diesel, alternative fuels, and EVs. Instead of a single gallons measure, managers have to reconcile odometer or telematics data with new energy units (like kWh) and then tie that usage back to where the vehicle actually traveled. This is difficult to do reliably when that information lives in paper logs, charging portals, and disconnected fuel-card exports.
How often must IFTA reports be filed?
IFTA reports should be filed quarterly. Organizations file a single quarterly fuel tax report with their base jurisdiction showing all miles traveled and fuel purchased in each participating state or province. They either make payments or are due refunds. Submit quarterly reports to your base jurisdiction by the following deadlines:
Q4: January 31
Q1: April 30
Q2: July 31
Q3: October 31
Which IFTA jurisdictions have established tax rates for electricity?
In Q1 2026, these states had published tax rates for electricity under IFTA:
Wyoming
Indiana
Iowa
New Mexico
North Dakota
Pennsylvania
Which IFTA jurisdictions are “report-only” on electric and alternative fuels?
Currently, California is the only state where you are required to report alternate and electric fuel data for IFTA without having to pay taxes on them. However, you must still include electric and alternative fuels on your IFTA reports, no matter which jurisdictions you operate in.
Do we currently need to file IFTA reports for our electric and alternative fuel trucks?
Yes, if these vehicles are considered qualified motor vehicles that cross jurisdictional lines, you need to include them in your quarterly IFTA report. This is the definition of an IFTA-qualified motor vehicle:
- Has two axles and a gross vehicle weight (GVW) or registered GVW exceeding 26,000 pounds (11,797 kilograms).
- Has three or more axles, regardless of weight.
- Is used in combination with another piece of equipment (e.g., truck and trailer), and the gross combination weight (GCW) or registered GCW exceeds 26,000 pounds (11,797 kilograms).
Used for business, not recreation.
Where is IFTA going next?
The long-term vision for IFTA involves potentially evolving into a multi-state clearinghouse for road usage charges (RUC), which would shift the focus from taxing consumed energy to taxing distance traveled. This transition could support highway funding stability as the commercial fleet moves away from liquid fossil fuels. For more information about potential changes, review the June 2025 strategic blueprint for IFTA here.
However, whatever changes to tax law by state and province happen next, fleet-based organizations need to stay compliant. The best way to prepare is to simplify existing IFTA workflows as much as possible.
What happens with IFTA if we charge our vehicles privately?
If you charge vehicles privately, some states may require separate forms outside of IFTA, such as PA DMF-101. If you are a PA-based interstate carrier and you own a private CNG station or a private high-speed EV charging hub for your fleet, you have to file form DMF-101 monthly or quarterly to pay the initial Pennsylvania tax on the fuel you consumed from your private source. You then report that volume on your IFTA return as tax paid fuel so you don’t get double-taxed when IFTA calculates your multi-state liability.
How can organizations with fleets prepare for upcoming changes in IFTA regulations?
Prepare for upcoming IFTA changes by simplifying and modernizing your fuel tax workflows now. Start by capturing distance-by-jurisdiction, fuel purchases, and tax calculations automatically instead of rebuilding from paper, emails, and spreadsheets every quarter. Next, continuously track fuel and energy usage by vehicle and jurisdiction for all fuel types, including electricity and alternative fuels. Finally, work with a platform like the Motive Connected Operations Platform that supports mixed fuel fleets, captures the right IFTA data across fuel types, and evolves as IFTA and state tax codes continue to change.
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