The International Fuel Tax Agreement (IFTA) simplifies the administration of motor vehicle fuel taxes across the continental United States and Canadian provinces. Fleets rely on IFTA reporting to calculate and pay taxes on fuel consumption in each jurisdiction.

How to calculate IFTA tax

Calculating IFTA tax involves determining fuel consumption and tax owed in each jurisdiction. Follow these steps for accurate calculations:

  1. Track Total Miles Driven in Each Jurisdiction. Record the miles driven in each state or province using trip logs, odometer readings, or GPS tracking.
  2. Calculate Overall Fuel Mileage. Use the formula:
    Total Miles Driven ÷ Total Gallons Purchased = Overall Fuel Mileage
  3. Determine Fuel Consumed per Jurisdiction. For each jurisdiction, calculate fuel consumption:
    Total Miles Driven in Jurisdiction ÷ Overall Fuel Mileage = Fuel Consumed in Jurisdiction
  4. Apply the Jurisdiction’s Tax Rate. Multiply the fuel consumed by the tax rate of that jurisdiction to calculate the tax owed:
    Fuel Consumed in Jurisdiction × Tax Rate = Tax Owed
  5. Reconcile Tax Paid and Tax Owed. Use this formula to find the balance:
    Tax Owed – Tax Paid = Net Tax Payable or Refund

Tax rates may vary quarterly, so always reference the latest IFTA tax matrix for accuracy. Recent updates include jurisdiction-specific rate changes for 2025, such as Illinois increasing its diesel tax to 73.6 cents per gallon and Michigan’s motor fuel tax rising to 31 cents per gallon. North Carolina has also adjusted its rate to 40.3 cents per gallon for the year.

IFTA reporting rules and regulations

Fleets operating across multiple jurisdictions in the continental U.S. or Canada must comply with IFTA requirements. Vehicles qualifying for IFTA include:

  • Vehicles with a gross or registered gross weight over 26,000 lbs.
  • Three-axle vehicles regardless of weight.
  • Vehicles in combination exceeding 26,000 lbs.

License your qualified vehicles in your base jurisdiction to receive an IFTA license and decals. File one consolidated tax return each quarter to simplify reporting and reduce administrative burdens.

As of 2024, IFTA requires that distance records produced by vehicle tracking systems be accessible in electronic spreadsheet formats like XLS or CSV. Static image formats such as PDFs are no longer acceptable.

IFTA reporting Q&A

What is IFTA reporting?

IFTA streamlines fuel tax reporting for commercial vehicles operating in multiple jurisdictions. Drivers report miles driven and fuel purchased to their base jurisdiction, which then handles tax allocation across other member jurisdictions.

What does IFTA stand for?

The acronym stands for the International Fuel Tax Agreement. The agreement covers fuel tax reporting for 48 U.S. states and 10 Canadian provinces.

How do I file an IFTA report?

Filing involves aggregating mileage and fuel purchase data by jurisdiction. Submit quarterly reports to your base jurisdiction by the following deadlines:

  • Q1: April 30
  • Q2: July 31
  • Q3: October 31
  • Q4: January 31

How do I file IFTA online?

Many jurisdictions offer online portals for IFTA reporting. Set up an account with your base jurisdiction for electronic submissions.

What happens if I don’t file IFTA?

Failure to file results in penalties of $50 or 10% of taxes owed, whichever is greater. Licenses may also be suspended if not filed within 30 days of the deadline.

How do I apply for an IFTA license?

Submit an application to your base jurisdiction. Include carrier information such as the registered business name, mailing address, and USDOT number. Temporary permits may be issued while awaiting decals.

How often do I renew my license?

Renew IFTA licenses annually. Decals expire at the end of the calendar year, so plan renewals accordingly. A two-month grace period is provided for the display of renewal credentials, but applications should be submitted before the year’s end.

Can I drive without an IFTA sticker?

Driving without valid IFTA decals can result in fines exceeding $500 per violation. Temporary permits should be used while awaiting decals.

What fuel is reported in IFTA?

Include all motor fuel purchased, received, and consumed in business operations. Maintain separate records for each fuel type.

What’s the difference between taxable gallons and tax-paid gallons?

Taxable gallons refer to fuel consumed in a jurisdiction. Tax-paid gallons refer to fuel purchased with taxes already included at the point of sale.

How do I keep track of my IFTA miles?

Modern GPS and fleet management systems simplify mileage tracking. Solutions like the Motive ELD can automatically record state-line crossings and calculate jurisdictional mileage.

How can I simplify IFTA reporting?

Use fleet management software to:

  • Automatically track miles driven and fuel purchased.
  • Save individual trip reports with state-line odometer readings.
  • Digitally store fuel receipts and associate them with trips.
  • Integrate fuel card purchases for consolidated reporting.

Simplify IFTA reporting with Motive

The Motive platform streamlines IFTA reporting, automating mileage and fuel tracking, calculations, and report generation. 

Additionally, The Motive Card lets you file IFTA in seconds. Motive’s 360° view of fleet and spend data allows for automated filing, saving hours spent on manual reconciliations. Distances and fuel transactions are automatically allocated as well.

Save time, reduce manual errors, and prepare your fleet for audits with Motive. Request a demo today.