The International Fuel Tax Agreement (IFTA) is a tax collection agreement among the 48 contiguous US states and 10 Canadian provinces. Before IFTA, a motor carrier operating across 15 states would need to file separate fuel tax returns with each state, maintain separate accounts, and track fuel purchases and mileage independently for every jurisdiction. IFTA consolidates this into a single quarterly return filed with your base jurisdiction, which then distributes taxes owed to every other member jurisdiction.
IFTA was fully implemented in 1996 and is administered by IFTA, Inc. It does not set tax rates — each state and province sets its own fuel tax rate independently. IFTA only standardizes the reporting and redistribution mechanism. Alaska and Hawaii are not IFTA members. The District of Columbia is a member. In Canada, the Northwest Territories, Nunavut, and Yukon are not members.
IFTA applies to qualified motor vehicles, defined as vehicles used, designed, or maintained for transporting persons or property, AND meeting one of these criteria:
The vehicle must also operate in two or more IFTA member jurisdictions to trigger IFTA requirements. A qualifying truck that only operates within a single state does not need IFTA credentials. Recreational vehicles are excluded unless used in connection with a business.
Your base jurisdiction is the IFTA member jurisdiction where your fleet is based — specifically, where your qualified motor vehicles are dispatched, controlled, and managed, and where your mileage is accrued or allocated. This is typically the state (or province) where your principal place of business is located. You apply for IFTA credentials through your base jurisdiction's tax authority, file all quarterly returns with that jurisdiction, and make all payments (or receive credits) through that single point of contact.
Choosing the correct base jurisdiction matters. If you relocate your operations, you must transfer your IFTA account to the new base jurisdiction. Operating under the wrong base jurisdiction is a compliance violation and can complicate audits.
IFTA has 58 member jurisdictions: the 48 contiguous US states plus the District of Columbia, and 10 Canadian provinces (Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan). When you operate in any of these jurisdictions, your mileage there counts toward your IFTA return. If you travel through a jurisdiction, even without making a delivery, those miles must be reported.
When approved, you receive an IFTA license (one per fleet, kept at your principal place of business) and two IFTA decals per qualified vehicle (affixed to the exterior of the cab on both sides). The license and decals are renewed annually — most jurisdictions issue them for the calendar year (January 1 through December 31). Operating a qualified vehicle without valid IFTA decals in an IFTA jurisdiction can result in the purchase of a temporary trip permit, fines, or being placed out of service at a roadside inspection.
Replacement decals are available from your base jurisdiction for a small fee, typically $2-$5 per decal. Lost or stolen decals should be replaced immediately, as enforcement officers verify them visually.
Alaska and Hawaii are not IFTA members. If you operate in Alaska, you file fuel taxes directly with the Alaska Department of Revenue. Oregon participates in IFTA for fuel tax purposes but also imposes a separate Weight-Mile Tax that is not part of the IFTA system. Fuel tax rates across IFTA jurisdictions range from approximately $0.085/gallon (New Jersey) to $0.741/gallon (Pennsylvania) for diesel, with most states falling between $0.20 and $0.40 per gallon. These rates change periodically — check your base jurisdiction's IFTA rate table before each quarterly filing.
The core IFTA calculation determines how much fuel you "consumed" in each jurisdiction, regardless of where you actually purchased fuel. The formula works in three steps:
If you bought more fuel (and paid more tax) in a state than you "used" there based on mileage, you receive a credit. If you drove many miles in a state but bought little or no fuel there, you owe additional tax. The quarterly return nets all credits and debits across all jurisdictions into a single payment or refund.
IFTA tax rates vary significantly by jurisdiction and fuel type. Diesel and gasoline have different rates in most states. Several jurisdictions impose surcharges on top of the base rate — Indiana, Kentucky, and Virginia all have variable-rate surcharges that change quarterly based on wholesale fuel prices. When filing, you must use the rate table published for that specific quarter by IFTA, Inc. Using the wrong quarter's rates is a common error that triggers audit adjustments.
Canadian provinces charge fuel tax in cents per liter, which must be converted when filing with a US base jurisdiction. The IFTA return form handles this conversion, but you must ensure your mileage in Canadian provinces is recorded in either miles or kilometers consistently and converted appropriately.
IFTA returns are filed quarterly with firm deadlines:
Late returns incur a $50 penalty or 10% of net tax due (whichever is greater), plus interest at a rate set by each jurisdiction (typically 1% per month on unpaid balances). Even if you owe nothing — if your fleet was idle for the quarter — you must still file a zero-return by the deadline. Failure to file for two consecutive quarters can result in IFTA license revocation by your base jurisdiction.
IFTA requires you to maintain detailed records that support every number on your quarterly return:
GPS and ELD data is increasingly accepted (and often preferred by auditors) as a supplement to manual mileage logs. Fuel card transaction reports are excellent supporting documentation for fuel purchases but do not replace the requirement for individual receipts showing all required fields.
The most common IFTA filing errors that trigger audits or penalties:
All IFTA supporting records must be retained for 4 years from the tax return due date or filing date, whichever is later. This includes fuel receipts, mileage logs, trip reports, ELD data exports, fuel card statements, and fleet vehicle lists. Organize records by quarter for easy retrieval during audits. Digital records are acceptable if they are complete, legible, and accessible within a reasonable time when requested by auditors.
The International Registration Plan (IRP) is a registration reciprocity agreement among the 48 contiguous US states, the District of Columbia, and 10 Canadian provinces. Under IRP, a motor carrier registers its fleet in a single base jurisdiction and receives one apportioned plate and one cab card per vehicle that authorizes operation in all jurisdictions listed on the cab card. Without IRP, a carrier operating in 30 states would need 30 separate registration plates per vehicle — an administrative impossibility for most fleets.
IRP applies to power units (tractors and straight trucks) used in interstate or international commerce. Trailers are generally registered in a single jurisdiction under the trailer's own registration, not under IRP (though some jurisdictions offer proportional trailer registration).
IRP registration fees are apportioned based on mileage. The formula for each jurisdiction:
If your fleet drove 500,000 total miles last year and 50,000 of those were in Texas, your Texas apportionment percentage is 10%. You would pay 10% of Texas's full annual registration fee for each vehicle in your fleet. This calculation is performed for every jurisdiction where you operated.
Each jurisdiction sets its own registration fee schedule, often based on vehicle gross vehicle weight (GVW) or registered gross vehicle weight (RGVW). Heavier vehicles pay higher base fees, and the apportioned amount reflects both weight and mileage percentage.
First-year applicants have no prior-year mileage data, so they submit estimated mileage by jurisdiction for the registration year. These estimates should be realistic — if your actual mileage deviates significantly from estimates, your second-year apportionment (based on actual first-year data) may result in substantially different fees. Some jurisdictions require a minimum distance percentage (often 5-10%) for any listed jurisdiction.
Renewal applicants use actual mileage from the preceding year (the "reporting period") to calculate apportionment percentages. This data comes from your fleet's mileage tracking system — the same data you use for IFTA reporting. IRP and IFTA mileage should reconcile; discrepancies between the two are an audit red flag.
The IRP cab card is your vehicle's proof of registration authority. It lists every jurisdiction where the vehicle is authorized to operate, along with the vehicle's RGVW, plate number, and registration period. The cab card must be carried in the vehicle at all times. At a roadside inspection, officers verify the cab card to confirm the vehicle is legally registered to operate in that state. Operating without a cab card — or in a jurisdiction not listed on it — is a registration violation that can result in fines and the vehicle being placed out of service.
Most jurisdictions issue cab cards annually. Some jurisdictions now offer electronic cab cards (available via mobile app), though many enforcement agencies still accept only printed copies. Check your base jurisdiction's policy before relying solely on electronic versions.
If you need to operate in a jurisdiction not currently on your cab card, you must file a supplemental application with your base jurisdiction to add that jurisdiction. This triggers a recalculation of your apportionment and an additional fee for the remainder of the registration year. Similarly, adding new vehicles to your fleet requires a supplemental filing to get IRP plates and cab cards for those units.
Removing a vehicle (sold, totaled, or retired) requires notifying your base jurisdiction and surrendering the apportioned plate. You may be eligible for a prorated refund of unused registration fees for the remainder of the year, depending on your base jurisdiction's refund policy. Removing a jurisdiction you no longer operate in takes effect at the next renewal — you cannot remove a jurisdiction mid-year and receive a refund in most cases.
If you need to operate a vehicle in a jurisdiction that is not listed on your cab card and you haven't had time to file a supplemental application, you can purchase a temporary trip permit (TTP). TTPs are typically valid for 72 hours and authorize one-way travel through the jurisdiction. They are available from the destination state's DMV, at ports of entry, or through third-party permit services. The cost ranges from $15 to $60 per permit depending on the state.
TTPs are a stopgap, not a permanent solution. If you're regularly operating in a jurisdiction under trip permits, you should add that jurisdiction to your cab card at the next opportunity. Auditors and enforcement officers view frequent trip permit use as a sign that your IRP registration may be incomplete.
Oregon does not charge a fuel tax on diesel for heavy trucks. Instead, it imposes a Weight-Mile Tax on trucks with a registered weight over 26,000 lbs operating on Oregon highways. The tax rate is based on the vehicle's declared weight (in 2,000 lb increments) and the number of miles driven in Oregon. Rates range from approximately $0.0493 per mile at 26,000 lbs to $0.2966 per mile at 105,500 lbs.
Carriers must obtain an Oregon WMT account from the Oregon Department of Transportation (ODOT) and file reports — monthly for carriers with high Oregon mileage, or quarterly for lower-volume operators. Oregon participates in IFTA for gasoline taxes, but the WMT is a completely separate system. You must track Oregon miles independently and file WMT returns in addition to your IFTA return. Failure to register or report results in a $465 minimum penalty per occurrence.
New York imposes a Highway Use Tax on trucks with a gross weight over 18,000 lbs (much lower than the IFTA threshold of 26,000 lbs). Every qualifying truck must obtain a HUT Certificate of Registration and display an NYHUT decal on the cab. The tax is based on mileage driven on New York public highways, with rates varying by weight class and fuel type — approximately $0.0113 to $0.0454 per mile for diesel vehicles.
HUT returns are filed quarterly with the New York Department of Taxation and Finance using Form TMT-2. Filing deadlines match the IFTA schedule (Apr 30, Jul 31, Oct 31, Jan 31). Additionally, New York applies a supplementary petroleum business tax (PBT) assessed through the same HUT filing. Carriers entering New York without a valid HUT decal face fines up to $500 and can be turned away at the port of entry.
New Mexico imposes a Weight Distance Tax on vehicles with a gross vehicle weight over 26,000 lbs. Carriers must obtain a New Mexico Weight Distance Tax Permit before operating in the state. The permit must be carried in the vehicle. Tax rates are based on declared gross weight, ranging from approximately $0.0121 to $0.0521 per mile at the heaviest weights.
Returns can be filed monthly or quarterly with the New Mexico Department of Transportation. Many carriers elect quarterly filing to align with their IFTA reporting cycle. Like Oregon WMT, New Mexico's weight distance tax is separate from IFTA and requires independent mileage tracking for New Mexico miles. New Mexico participates in IFTA for fuel tax, so you report NM miles on both your IFTA return (for fuel tax) and your NM WDT return (for the weight distance tax).
Kentucky's Weight Distance Tax applies to vehicles with a combined gross weight or licensed weight over 60,000 lbs — a significantly higher threshold than Oregon or New Mexico. Carriers register with the Kentucky Revenue Cabinet and file quarterly returns. The tax rate is $0.0285 per mile for all qualifying vehicles. Carriers must also obtain a KYU number and ensure it is displayed on qualifying vehicles.
Kentucky's 60,000 lb threshold means that many Class 8 trucks operating at full weight are subject to this tax, while lighter trucks and straight trucks are generally exempt. The quarterly filing deadlines are the same as IFTA: Apr 30, Jul 31, Oct 31, and Jan 31. Penalties for non-registration include $500 in fines plus back taxes with interest.
While Pennsylvania does not impose a standalone weight-distance tax, it has one of the highest diesel fuel taxes in the nation at $0.741 per gallon (as of 2025). Pennsylvania also assesses additional fees for overweight vehicles on certain roads and bridges. Carriers with 5+ axle vehicles operating extensively in Pennsylvania should budget for substantially higher IFTA net tax owed in PA quarters. The high fuel tax rate means that even if you purchase fuel in Pennsylvania, your credits may still fall short of the tax liability calculated from PA mileage, because the per-gallon tax is so high relative to other states.
The Unified Carrier Registration (UCR) is a separate, annual registration requirement for all motor carriers, brokers, freight forwarders, and leasing companies operating in interstate commerce. UCR fees are based on fleet size (number of commercial motor vehicles), not mileage. The 2025 fee schedule ranges from $176 for 0-2 vehicles to $73,346 for 1,001+ vehicles. Register at UCR.gov through your base state.
The annual deadline is January 1 (some states provide a grace period to March 1). UCR is often confused with IRP, but they serve completely different purposes: IRP apportions registration fees based on mileage, while UCR is a flat fee that funds state highway safety programs. Operating without current UCR registration is a violation and can result in fines of $100-$5,000 per vehicle per day in some states. Keep your UCR confirmation receipt in each vehicle as proof of registration.
IFTA audits are conducted by your base jurisdiction on behalf of all member jurisdictions. Your base state's IFTA audit unit selects carriers for audit based on several risk factors:
An IFTA audit typically covers a 3-year lookback period (though records must be retained for 4 years). Auditors will request:
Auditors reconstruct your returns from source records. If their reconstruction shows more tax owed than you reported, you pay the difference plus interest and potentially penalties. If their reconstruction shows you overpaid, you receive a credit or refund.
The minimum IFTA record retention period is 4 years, but best practice is to retain records for 5 years to account for late audit initiations and appeals. Organize records by:
Digital storage is acceptable and often preferred — scanned receipts, ELD data exports, fuel card CSV files, and digital trip logs. Ensure digital records are backed up and accessible. Paper records stored in boxes are still common but make audits slower and more painful for both parties.
The most frequent IFTA audit adjustments fall into these categories:
IFTA penalties escalate with severity:
Carriers that rarely have audit problems share these practices: