Understanding "Net Due": How IFTA Refunds and Surcharges Work
Why do I owe money if I paid tax at the pump? We demystify the "Net Due" calculation, fuel tax credits, and the impact of strategic fueling.
The Bucket Theory
Think of IFTA as a redistribution system. You pay tax at the pump to the state where you bought the fuel. But you owe tax to the state where you burned the fuel.
Strategic Fueling
Some drivers try to game the system by buying fuel in states with low pump taxes (like Missouri) and driving in states with high tax rates (like Pennsylvania).
The Trap: This results in a massive "Net Due" bill at the end of the quarter. You didn't pay enough at the pump to cover the high rates of the states you drove in.
Surcharges: The Hidden Cost
Be aware that surcharges (like in Kentucky or Virginia) are often not credited against fuel purchases. They are a pure additional cost. No matter how much fuel you buy in Kentucky, you still owe the surcharge for every mile driven there.
No More Surprises: FastIFTA's Smart Calculator provides a real-time "Net Due" estimate. Input your miles and fuel, and see exactly where you stand before the quarter ends, allowing you to budget your cash flow effectively.