Most truck drivers buy diesel wherever the pump price looks lowest. That’s usually the wrong move.
Here’s the thing — the price on the sign is not what you actually pay. Once you factor in IFTA fuel taxes, the cheapest pump can end up costing you more per gallon than the expensive one down the road.
This page shows you exactly how IFTA works, walks through a real calculation with current prices, and gives you a free calculator so you can run the numbers on your own routes. Drivers who understand this save $2,000–$5,000 per truck every year — just from knowing where to fuel.
IFTA stands for International Fuel Tax Agreement. It covers 48 U.S. states and 10 Canadian provinces (not Alaska, Hawaii, or D.C.).
The basic idea: you pay fuel tax based on where you drive, not where you buy fuel. Every quarter, you file a return that totals up your miles per state, your fuel purchases per state, and settles the difference.
You need an IFTA license if your vehicle has:
Your base state (where your truck is registered) issues your IFTA license and decal. You file quarterly returns there, and they handle distributing the taxes to other states.
Every time you buy diesel, the pump price already includes that state’s fuel tax. You’ve pre-paid it.
At the end of each quarter, IFTA compares:
If you owe more than you paid — you send a check. If you paid more than you owed — you get a credit (or refund).
This is why fueling strategy matters. If you fuel up in Illinois ($0.7380/gal tax) before driving through Tennessee ($0.2700/gal), you’ve pre-paid way more than Tennessee requires — and IFTA credits you the difference.
Quarterly filing deadlines: April 30 (Q1) | July 31 (Q2) | October 31 (Q3) | January 31 (Q4)
Late penalty: $50 or 10% of taxes owed — whichever is greater.
Important — the surcharge rule most drivers get wrong:
Some states charge a surcharge on top of the base fuel tax. Kentucky, for example, has a $0.2200/gal creditable rate plus a $0.1050/gal surcharge. That surcharge is not refundable through IFTA — it’s a permanent cost that stays in your per-gallon price no matter what.
So if you fuel in Kentucky at $3.413/gal:
Always calculate credits using the creditable rate only. Never include the surcharge in your credit math.
Let’s walk through a full quarterly calculation. One truck, three states, real pump prices (AAA, Feb 2026), real 1Q2026 IFTA rates.
Step 1 — Trip & Fuel Data
| Miles driven in Illinois (IL) | 2,400 miles |
| Miles driven in Kentucky (KY) | 1,800 miles |
| Miles driven in Tennessee (TN) | 2,200 miles |
| Total miles | 6,400 miles |
| Total gallons purchased (all states) | 960 gallons |
| Fleet MPG = 6,400 ÷ 960 | 6.6667 MPG |
Step 2 — 1Q2026 IFTA Rates (iftach.org)
| Illinois (IL) — creditable rate | $0.7380/gal | no surcharge |
| Kentucky (KY) — creditable rate | $0.2200/gal | $0.1050 surcharge ⚠ NOT refundable |
| Tennessee (TN) — creditable rate | $0.2700/gal | no surcharge |
Step 3 — Taxable Gallons Per State (miles ÷ MPG).
| Illinois: 2,400 ÷ 6.6667 | 360.00 gallons |
| Kentucky: 1,800 ÷ 6.6667 | 270.00 gallons |
| Tennessee: 2,200 ÷ 6.6667 | 330.00 gallons |
Step 4 — Tax Owed Per State
.
| IL: 360.00 gal × $0.7380 | $265.68 |
| KY: 270.00 gal × $0.2200 (creditable only) | $59.40 |
| TN: 330.00 gal × $0.2700 | $89.10 |
| Total tax liability | $414.18 |
Step 5 — Credits Earned at Pump (creditable rate only)
Pump prices: IL $3.820/gal | KY $3.413/gal | TN $3.503/gal (AAA averages, Feb 2026)
| IL: 200 gal fueled × $0.7380 | $147.60 credit |
| KY: 400 gal fueled × $0.2200 creditable only | $88.00 credit |
| KY: 400 gal × $0.1050 surcharge — GONE, not refundable | −$42.00 permanent cost |
| TN: 360 gal fueled × $0.2700 | $97.20 credit |
| Total creditable credits | $332.80 |
Step 6 — IFTA Balance
| Total tax owed | $414.18 |
| Total creditable credits | − $332.80 |
| IFTA balance due with quarterly return | $81.38 DUE |
| Kentucky surcharge (already paid, not recoverable) | $42.00 lost |
| Total real cost beyond pump price this quarter | $123.38 |
What If the Driver Had Fueled More in Illinois?
Same route. Same miles. But fueling 560 gal in Illinois instead of 200, and only 40 gal in Kentucky:
| IL: 560 gal × $0.7380 | $413.28 credit |
| KY: 40 gal × $0.2200 | surcharge: $4.20 lost | $8.80 credit |
| TN: 360 gal × $0.2700 | $97.20 credit |
| New total credits | $519.28 |
| Tax owed (unchanged) | $414.18 |
| New result | $105.10 CREDIT — money back! |
Creditable tax rates auto-fill on state select. Kentucky & Virginia surcharges shown separately — non-refundable.
| IFTA Special Diesel Tax Rates — 1Q2026 (U.S. States Only) | |||
|---|---|---|---|
| Source: IFTA, Inc. — iftach.org | Not final until March 2, 2026 | Rates change quarterly — verify before filing | |||
| State | Abbr | Creditable Rate $/gal | Surcharge $/gal |
| Alabama | AL | $0.3100 | — |
| Arizona | AZ | $0.2600 | — |
| Arkansas | AR | $0.2850 | — |
| California | CA | $0.9710 | — |
| Colorado | CO | $0.3250 | — |
| Connecticut | CT | $0.4890 | — |
| Delaware | DE | $0.2200 | — |
| Florida | FL | $0.4027 | — |
| Georgia | GA | $0.3710 | — |
| Idaho | ID | $0.3200 | — |
| Illinois | IL | $0.7380 | — |
| Indiana | IN | $0.6100 | — |
| Iowa | IA | $0.3250 | — |
| Kansas | KS | $0.2600 | — |
| Kentucky | KY | $0.2200 | $0.1050 |
| Louisiana | LA | $0.2000 | — |
| Maine | ME | $0.3120 | — |
| Maryland | MD | $0.4675 | — |
| Massachusetts | MA | $0.2400 | — |
| Michigan | MI | $0.5240 | — |
| Minnesota | MN | $0.3260 | — |
| Mississippi | MS | $0.2100 | — |
| Missouri | MO | $0.2950 | — |
| Montana | MT | $0.2975 | — |
| Nebraska | NE | $0.3180 | — |
| Nevada | NV | $0.2700 | — |
| New Hampshire | NH | $0.2220 | — |
| New Jersey | NJ | $0.5610 | — |
| New Mexico | NM | $0.2100 | — |
| New York | NY | $0.3805 | — |
| North Carolina | NC | $0.4100 | — |
| North Dakota | ND | $0.2300 | — |
| Ohio | OH | $0.4700 | — |
| Oklahoma | OK | $0.1900 | — |
| Oregon | OR | N/A | — |
| Pennsylvania | PA | $0.7410 | — |
| Rhode Island | RI | $0.4000 | — |
| South Carolina | SC | $0.2800 | — |
| South Dakota | SD | $0.2800 | — |
| Tennessee | TN | $0.2700 | — |
| Texas | TX | $0.2000 | — |
| Utah | UT | $0.3790 | — |
| Vermont | VT | $0.3100 | — |
| Virginia | VA | $0.3270 | $0.1430 |
| Washington | WA | $0.5840 | — |
| West Virginia | WV | $0.3570 | — |
| Wisconsin | WI | $0.3290 | — |
| Wyoming | WY | $0.2400 | — |
Rates shown are Special Diesel — 1Q2026. Source: iftach.org. This matrix is not final until March 2, 2026. Rates change every quarter — always verify before filing. Kentucky and Virginia have non-creditable surcharges on top of the rates shown.