Fuel buying myths and misunderstandings:
 
·      Don’t buy fuel in Indiana
·      Don’t buy fuel in Virginia
·      Don’t buy fuel in Oregon
·      Don’t buy fuel in Kentucky
·      Don’t buy fuel in New Mexico
 
We have learned that we must pay a tax for every mile driven in each State.  The tax is paid either at the pump or to IFTA, by each Commercial Motor Carrier, depending on the reported miles traveled in each State during each quarter of the year.  When the tax is paid at the pump, each carrier is given credit, by IFTA for the State tax paid.  When no fuel is purchased, but miles are driven in any State, each carrier must pay the State tax for those miles.  Since taxes differ, State to State, IFTA will credit or debit each carriers account and distribute the carriers’ monies to each traveled in State.  IFTA will then either issue a bill for underpayment or a refund for overpayment to each carrier each quarter.
 
The best advice we can give a money conscious driver before buying fuel is to look at the pump price (P), subtract any fuel card or other discount (D) you may receive, then subtract the State tax (T) to determine the cost (C) of fuel at the fuel stops you are considering.
 
Remember, P – D – T = C
 
So, you see, the State fuel tax is a “pay now” or “pay later” system and if Indiana or any of the above mentioned States has the least expensive bottom line cost (C), buy there and you’ll be money ahead.
 
For a list of each states fuel tax look at the special diesel column in this chart and use the top line for U.S.
 
IFTA Tax Matrix

Comments (8)

Linda Caffee

Bob and Linda started their driver careers after their children left home for college in 2000. Bob started as a driver for a large motor carrier with Linda as a rider. They decided to enter the Expedite industry as team drivers in 2005 and purchased their first Freightliner. Both, Bob and Linda have had their Class A licenses since the early 80's starting out driving in the oil field and hauling grain as fill in drivers where Bob worked as a diesel mechanic. Linda worked at the local country courthouse in data processing.

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Linda Caffee

Harold I have had some lively debates on this issue and you are right sometimes it is better to back away. If someone does not want to pay a mileage tax the only way is to not drive any miles in that state. I have really enjoyed talking to the many people I have about this subject and all that were willing to share their time and educate me on this topic as I also was one that did not understand it. I had to get out a piece of paper and play with some figures before the light bulb went on!

March 15, 2015 15:05:22 PM

Harold Leist

Be careful of how you talk about the surcharge/mileage portion. I've seen some drivers that are trying confused with that. I try to explain to them as far as figuring out the true cost of fuel just ignore it.

March 15, 2015 7:47:14 AM

Linda Caffee

New Mexico and Indiana are also mileage tax states that can be confusing .

March 15, 2015 4:15:30 AM

Joey Slaughter

Virginia has a surtax in addition to the fuel tax that is based on the miles driven, not how much fuel you buy in VA. There's a big misconception about it. The only way to avoid it, is to not drive in VA.

March 14, 2015 8:37:31 AM

Henry Albert

Your IFTA account should be viewed as a piggy bank in regards to how your fuel taxes are distributed among the states and Canadian provinces . The purpose of this blog breaks this subject to simple and understandable points . Do not buy your fuel to get a refund . Purchase your fuel at the location which has the lowest price after you remove the state fuel tax from the equation and you will be miles ahead in the long run even if you end up paying in at the end of a quarter . Thanks for tackling this subject Linda .

March 13, 2015 18:02:55 PM

Harold Leist

Shalom, forget about trying to play the game of buying enough fuel to pay the IFTA in each state. You pay the same tax and it doesn't matter where you buy the fuel. The tax is what it is. The only things that change are, did you save the max amount you could on fuel and are you going to get a refund or have to pay when you do your IFTA reports.

No matter what you do, you can not change the amount of tax that is paid on the miles you run, period.

March 13, 2015 16:42:56 PM

Linda Caffee

Shalom worry about the fuel and not the tax as it will all equal out. Take the tax out and find the cheapest fuel.

March 13, 2015 10:09:37 AM

Shalom Jacobs

Great stuff,
unfortunately, it's not so EZ {well, it is afterall a Gov. tax program}
there's still much money to be saved by knowing where we burn our fuel tax.
IF we know where we are going, we can carry those tax money into a state we drive less.
for example, P.A have 64C/G Tax & Ohio have 28C/G tax
for example @ 10 M/G we can drive 360 mil. in Ohio before we will even be charged a dime by Ohio for burning the fuel tax in their state.
BUT, if we fuel in Ohio & drive 360 mil. in P.A,{@ same 10M/G} we will be charged 12.96$ for burning the tax in their state. this is because we did not pay enough tax on the fuel used in their state.
it can get MUCH more complicated when we try to take into account the 'real' price of fuel {Pump price minus State tax}, the different prices along our routs & different discounts we can get along our routs.

March 13, 2015 8:01:59 AM