2025 IFTA Tax Rates Explained: Why "Composite Rates" Might Surprise You
Tax rates aren't static. Learn about quarterly fluctuations, split rates in states like Illinois, and hidden surcharges that can lead to underpayment.
It's Not Just About Pump Price
Many drivers make the mistake of calculating their fuel tax liability based on the price at the pump. But IFTA tax rates are a completely different beast. They fluctuate quarterly and often include hidden surcharges that aren't obvious when you're filling up.
Rate Fluctuations
Just because the tax rate in a state was $0.24 last quarter doesn't mean it's the same today. Jurisdictions adjust their rates based on legislation and fuel prices. Using an old rate sheet is the fastest way to miscalculate your return.
The Confusion of Split Rates
Some states, like Illinois, have a "Part A" and "Part B" tax structure.
- Part A is the standard motor fuel tax.
- Part B is an additional tax based on the average wholesale price.
Manual calculators often miss this second layer, leading to significant discrepancies.
Hidden Surcharges
Several states impose "surcharges" on top of the standard fuel tax for heavy vehicles. These are often not collected at the pump but must be paid quarterly.
- Kentucky (KYU): Famous for its weight-distance tax, but also has specific IFTA surcharges.
- New York & New Mexico: Both have highway use taxes that complicate the IFTA math.
If you simply multiply your gallons by the base rate, you will underpay and potentially flag yourself for an audit.
The FastIFTA Advantage: Our Smart IFTA Calculator automatically pulls the latest tax matrix from IFTA, Inc. every quarter. We handle the composite rates and surcharges for you, so you never have to worry about doing the math yourself.