Does IFTA apply to electric vehicles?
I’ve received several questions recently about reporting fuel on quarterly tax returns for electric vehicles that are qualified vehicles under the International Fuel Tax Agreement (IFTA).
Until recently, most of the fuel used in commercial vehicles has been either diesel or gas, and the IFTA jurisdictions have established fuel tax rates for these types of fuel. The questions are a reminder that electric vehicles are no longer a far off, distant possibility — they are here, in use, now.
So what does a carrier do about fuel reporting if they operate electric vehicles?
Where we stand today
As of today, only Pennsylvania has established an electric-vehicle tax rate for IFTA tax returns. The rest of the jurisdictions are still working on solutions.
Thankfully, the guidance received from states we’ve reached out to has been consistent. If you operate qualifying vehicles interstate, you should register those vehicles under IFTA — and under the International Registration Plan (IRP) as well. You should track your mileage the same as you would for gas- or diesel-fueled units. The only difference is that there will be no tax rate listed on your return (except for any Pennsylvania miles), and there is no electric-vehicle tax due.
IFTA is working on it
With the rapid emergence of electric vehicles in commercial fleets, IFTA has formed an electric commercial vehicle working group that is actively planning the adjustments needed to accommodate tax collection from electric vehicles.
Status quo for now
Whether you have a fleet of electric vehicles or a mixed fleet using diesel, gas, or electric, treat them all the same for now. Track all miles for your IFTA- and IRP-registered vehicles, collect fuel receipts as needed, and file your quarterly IFTA returns.
We’ll keep monitoring the progress on electric vehicle tax rates and keep you updated as developments happen.