instructions on how to calculate miles per gallon on your IFTA returns during the fuel tax holidays for Maryland, Georgia, and Connecticut.
Fuels summary
For more definitions, see the IFTA Articles of Agreement, Article II, Definitions, on the IFTA website.
Tax-paid fuel
Fuel that has the federal and state tax included in the price when it’s bought. Generally, fuel bought at a retail pump has federal or state fuel tax included in the purchase price. Gasoline and undyed diesel are two examples. To qualify for an IFTA tax-paid credit, the retailer’s receipt must show that tax was paid.
Exempt fuel
Fuel that’s exempt from taxes and doesn’t have federal or state tax included in the price. Exempt fuel is marked to identify it as exempt (for example, dyed diesel fuel). Each jurisdiction has its own rules about who can use exempt fuel and where they can use it. If you want to use exempt fuel, check with the appropriate jurisdiction. In Idaho, sales tax is due on exempt fuel unless a sales tax exemption applies.
Untaxed fuel
Fuel that doesn’t include federal or state fuel tax in the price. It can include exempt fuel or can be fuel on which tax isn’t paid (even though tax should be paid). It’s generally illegal to use untaxed fuel in vehicles licensed for use on public (“taxable”) roads.
Special rules apply to fuel bought on an Indian reservation. Contact the appropriate jurisdiction where the reservation is located for more information.
Taxable fuel
Fuel is taxable depending on its use. For most taxpayers, it’s taxable when it’s placed in a motor vehicle. For example, gasoline is taxable when placed in a licensed or required-to-be-licensed motor vehicle. Diesel is taxable when placed in a licensed motor vehicle and driven on public (“taxable”) roads.
Nontaxable fuel
Fuel is nontaxable when used for an exempt purpose. For example, in Idaho some roads are not supported by a federal, state, county, or city agency and are not taxable. Diesel isn’t taxable if it’s used in a vehicle on a road that isn’t a public (“taxable”) road.
Tax-paid gasoline isn’t taxable when its used in riding lawn mowers or similar equipment.
More terms
Alternative fuels
The Federation of Tax Administrators (FTA) Motor Fuel Section Uniformity Guide defines alternative fuels as any accountable product/motor fuel other than gasoline, gasohol, diesel fuel, dyed diesel fuel, kerosene, or dyed kerosene.
Auxiliary engine
An engine separate from the main engine that propels the vehicle and which is fueled by the main supply tank of a vehicle. Examples include auxiliary engines used to operate equipment such as refrigeration units and carpet cleaning units.
Base jurisdiction (R212)
The jurisdiction where you register your qualified motor vehicles, maintain the operational control and records of the vehicles, and travel some distance in your IFTA fleet vehicles.
Bulk fuel
Fuel kept in a tank (not the main supply tank of a vehicle) and redistributed to equipment and vehicles. This includes fuel placed in mobile fuel tanks and fuel kept in a small tank in the bed of a pickup truck. Most motor fuel can be stored in a bulk storage tank.
Diesel fuel, dye-added
Diesel fuel with a special red dye added to it at an IRS-recognized terminal or refinery that doesn’t include federal or state motor fuel tax in the purchase price. (See 26 USC 4082.) Dyed diesel fuel is for equipment and certain vehicles. In Idaho, dyed diesel fuel is subject to fuel use tax if it’s used for a taxable purpose. Dyed diesel may be subject to sales and use tax if not subject to fuel tax.
Federal and state law prohibits the use of dyed diesel fuel in most licensed vehicles and in unlicensed vehicles equipped for highway use. This includes vehicles that never leave private property or that operate entirely on job sites or Forest Service roads. Even occasional use of dyed diesel will contaminate a fuel tank and is against the law.
Diesel fuel, undyed
Undyed diesel can be used for any purpose, including operating or propelling a motor vehicle on public (“taxable”) highways. It includes state and federal fuel taxes in the purchase price. Some jurisdictions, like Oregon, charge a weight/distance tax on commercial vehicles instead of a fuel tax on undyed diesel.
Highway (IC §63-2401)
In Idaho, a roadway open for use by the public and maintained by a federal government agency or the state of Idaho or its political subdivisions (e.g., county, city, agency, district). Highways can be made of concrete, asphalt, gravel, composition, dirt, or other materials.
IFTA Fleet Consolidation
You can merge multiple IFTA fleets into one after getting approval from the IFTA commissioners of the affected jurisdictions. After consolidation, you’ll need to report to one base jurisdiction.
IFTA-qualified vehicles (R245)
An IFTA-qualified vehicle is designed to transport persons or property and is:
- A power unit with two axles and a gross vehicle weight (or registered gross vehicle weight) of more than 26,000 pounds, or
- A power unit with three or more axles, regardless of weight, or
- A tractor-trailer combination with a combined gross vehicle weight (or registered gross vehicle weight) of more than 26,000 pounds.
If a vehicle doesn’t qualify, it can’t be included in an IFTA fleet, display an IFTA decal, or have its distance or gallons included on an IFTA fuel tax return.
Vehicles that don’t qualify include: Recreational vehicles (as defined in R248), motor homes, pickup trucks with attached campers, and buses that are used exclusively for personal pleasure.
Individual Vehicle Distance and Fuel Report (IVDR)
A single document you use to record the distance traveled and fuel consumed by each qualified vehicle in your IFTA fleet. This can be printed on the outside of a trip envelope filled out by the driver.
International Registration Plan (IRP)
An agreement by the IFTA jurisdictions and the District of Columbia that apportions registration fees based on total distance operated in all jurisdictions.
Jurisdiction (R227)
- A state of the United States or the District of Columbia;
- A province or territory of Canada; or
- A state, territory, or agency of Mexico.
Miles per gallon (MPG)
Total gallons of fuel consumed divided into total miles traveled. For IFTA returns, this includes all fuel used by the IFTA fleet vehicles, regardless of where or how the fuel was acquired. Total miles are miles traveled everywhere, including off-highway miles and miles driven under a temporary permit for fuels tax.
Nontaxable distance
In Idaho, nontaxable distance is when a vehicle is either operating under a temporary fuels tax trip permit or driven off-highway and therefore not subject to motor fuel taxes. Each jurisdiction has its own definition of nontaxable distance.
Off-highway miles (Idaho only)
Any miles not driven on a highway.
Over-the-road (OTR) fuel purchases
Fuel placed directly into the main supply tank of a vehicle that includes the jurisdiction’s fuel tax.
Penalty and interest
If you don’t file, file late, or don’t pay your tax by the due date of the return, penalty and interest will be charged. Penalty is calculated at 10% of the tax due or $50, whichever is greater. Interest is due for each month the return is late according to the postmark. (One day late in a month makes the return late for the entire month).
If no tax is due for a jurisdiction, no interest is due. If you overpay, no interest is added to your refund. The Form 3150 instructions has a chart for the applicable interest rate.
If you make a partial payment, it’s credited first to any interest, second to tax, and then to the penalty. For example: You file a return which is due April 30, 2017 with a tax due of $1,000, but you don’t file it until June 7, 2017. You’ll be charged a penalty of $100 and interest of $20 (one day or more into the month is considered a full month). The total due is $1,120. If the payment is $1,000 it would be applied as follows: Interest: $20 + Tax: $980 + Balance due: $120 ($20 tax plus the $100 penalty).
Interest continues to apply to the unpaid tax balance of $20 until it is paid in full.
Power take-off (PTO) equipment
Vehicle-mounted equipment that’s powered by the main engine that also propels a motor vehicle. Examples include: trash compactors, concrete mixers, sewage pumps, conveyors, or loading/offloading devices on vehicles.
Special fuels
In Idaho, special fuels includes diesel, biodiesel, biodiesel blends, propane, and natural gas. (IC §63-2401)
Statute of limitations
The time period during which either you or a jurisdiction can change the information reported on an original return and claim additional tax due or a refund. In Idaho, the statute of limitations is three years from the due date of the return, or the date it was filed, whichever is later.
Tax-paid gallons
These are gallons of fuel that have a jurisdiction’s fuels tax included in the purchase price. It can include fuel bought at retail stations or fuel delivered in bulk.
Motor fuel bought from an Indian-owned retail outlet in Idaho might not include the Idaho motor fuels tax. If the fuel doesn’t include the tax, it doesn’t qualify as an Idaho tax-paid purchase unless authorized in an agreement between the state and a specific tribe (Idaho Code sections 63-2444 or 67-4002.) Read about Idaho Fuel Purchased on Indian Reservations or contact us.
Temporary decal permits
The base jurisdiction can issue you a 30-day IFTA temporary decal permit valid for all member jurisdictions if you’re a licensee in good standing. You can carry this instead of displaying the annual decals. The base jurisdiction can charge you an administrative fee to cover the cost of issuance. Temporary decal permits:
- Must be vehicle-specific
- Must show an expiration date
- Must be carried in the vehicle (but don’t have to be displayed)
Temporary fuels tax trip permit (temporary permit)
A temporary permit allows conditional travel in a jurisdiction. You can buy it at a port of entry or from an authorized permit agent on a trip-by-trip basis.
Other temporary permits include ones for temporary registration fees, overweight permits, and overlength permits. You can buy them in any combination, and they’re governed by the laws of the jurisdiction that issues them.
In Idaho, temporary permits expire when the vehicle they are purchased for leaves Idaho or at the end of a specified time period, whichever occurs first.