Motor carrier fuel/highway use/mileage tax

Scope

All commercial motor vehicles operating in the United States or Canada must be registered in their base jurisdiction for fuel-use-tax reporting.

Regulatory citations

• International Fuel Tax Agreement
• 49 CFR 392.2 Applicable operating rules

Key definitions

• Base jurisdiction: The member jurisdiction where qualified motor vehicles are based for vehicle registration purposes.
• Jurisdiction: A state of the United States of America, the District of Columbia, a province or territory of Canada, or a state of the United Mexican States.
• Total distance: All miles or kilometers traveled during the tax reporting period by every qualified vehicle in the licensee’s fleet, regardless of whether the miles or kilometers are considered taxable or nontaxable by a jurisdiction.

Summary of requirements

IFTA, which is a base state registration system, allows motor carriers to require only one license, one set of fuel credentials, and file one quarterly tax return. Although the tax return is being filed only with the base state, the carrier must list total distance traveled and all fuel purchased for all jurisdictions on the tax return. In addition, several U.S. jurisdictions have a mileage or highway use tax that they assess against motor vehicles. This tax is based on the miles a vehicle operates in the jurisdiction and is in addition to the fuel use tax.

Fuel use tax. As stated above, all commercial motor vehicles operating in the United States or Canada must be registered in their base state for fuel-use-tax reporting. Registration is however, predicated on the size/weight of the vehicles and/or if they are operating just in their base state or if they travel interstate. For those vehicles over 26,000 lbs. gross vehicle weight (GVW) and operating in more than one jurisdiction, the vehicles must be registered under the International Fuel Tax Agreement (IFTA). Vehicles under the GVW weight limit have reciprocity to operate in all jurisdictions. Vehicles operating strictly in their base state are required to register in some jurisdictions and not in others. Carriers should check with their base state as to the registration regulations.

Highway use/mileage tax. Several U.S. jurisdictions have a mileage or highway use tax that they assess against motor vehicles. This tax is based on the miles a vehicle operates in their jurisdiction and is in addition to the fuel use tax. Mileage tax is reported on a separate report from the IFTA return.

States that have an additional mileage or highway tax include:

• Connecticut highway use fee
  • Applies to eligible motor vehicles 26,000 pounds or more
• Kentucky
  • Known or referred to as the KYU number
  • Applies to all vehicles 60,000 lbs. or more
• New Mexico weight-distance tax
  • Applies to all vehicles 26,001 lbs. or more
• New York Highway Use Tax (HUT)
  • Applies to all vehicles that are either:
    • 18,000 lbs. GVW, or
    • Empty weight is:
      • 8,000 lbs. or more for a truck, or
      • 4,000 lbs. or more for a tractor
• Oregon weight-mileage tax
  • Applies to all vehicles 26,001 lbs. or more