How to Calculate IFTA Tax: A Step-by-Step Guide
Learn the formula for calculating your IFTA fuel tax, how to handle surcharges, and how to ensure your quarterly reports are accurate.
The IFTA Calculation Formula
Calculating your IFTA tax might seem complicated, but it follows a logical process. The goal is to figure out if you paid enough tax at the pump for the miles you drove in each state.
Step 1: Calculate Overall Fleet MPG
First, you need to know your average fuel consumption for the quarter.
Step 2: Determine Taxable Gallons per State
For each state you drove in, calculate how many gallons you should have used based on your MPG.
Step 3: Calculate Tax Owed vs. Tax Paid
Now, compare what you owe vs. what you already paid.
- Tax Owed: Taxable Gallons × State Tax Rate
- Tax Paid: Gallons Purchased in State × State Tax Rate
Step 4: The Net Result
Subtract the Tax Paid from the Tax Owed.
- If the number is positive, you owe that amount to the state.
- If the number is negative, the state owes you a credit/refund.
Pro Tip: Use an automated tool like FastIFTA's Calculator to handle these calculations instantly and avoid math errors.
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