In some states, IFTA is not your only use tax
The International Fuel Tax Agreement (IFTA) greatly simplified fuel tax reporting for carriers traveling through multiple jurisdictions. However, several U.S. jurisdictions assess additional mileage or highway use taxes in addition to the fuel use tax. It’s important to note that mileage tax under these programs is reported on separate reports from the IFTA return.
Kentucky’s weight-distance “KYU” tax
Carriers operating motor vehicles interstate or intrastate in Kentucky with a combined license weight over 59,999 pounds are subject to Kentucky’s weight-distance (KYU) tax. A KYU license is required, along with quarterly reports for mileage tax.
You cannot pay for KYU on your IFTA tax form, as these are two different programs:
- IFTA is a fuel tax based on the fuel consumed by a vehicle within a certain IFTA jurisdiction. IFTA taxes apply to vehicles over 26,000 pounds or with three or more axles regardless of weight.
- KYU is a highway usage tax that is based purely on KY mileage. If your vehicle is over 59,999 pounds, you will need to pay both.
A temporary KYU trip permit is available if you do not make regular trips through the state.
New Mexico weight-distance tax
In New Mexico, the weight-distance tax applies to intrastate and interstate commercial vehicles with a declared gross vehicle weight in excess of 26,000 pounds. The tax is based on vehicle weight and miles traveled on New Mexico roads. If this program applies to your fleet, you must register and apply each year for a New Mexico Weight-Distance Tax Electronic Permit for each of your vehicles. If a quarterly weight-distance tax report has not been submitted, the system will not allow the e-permit to be processed.
Under this program, you do have options. If your trucks operate on New Mexico highways, you can:
- Register each vehicle and then report and pay weight-distance tax quarterly, or
- Pay the trip tax each time one of your trucks enters or exits the state.
New York highway use tax
The highway use tax (HUT) is imposed on motor carriers for the privilege of operating motor vehicles on the highways of New York. The HUT applies to motor carriers operating any of the following on public highways in the state:
- An automobile, truck, tractor, or other self-propelled device, alone or in combination with any trailer, semi-trailer, or dolly, with a gross weight over 18,000 pounds, or
- Any truck with an unloaded weight over 8,000 pounds, or
- Any tractor with an unloaded weight over 4,000 pounds.
If this describes any of your vehicles, you must:
- Obtain a certificate of registration for each motor vehicle subject to the tax before operating that vehicle on the public highways of New York State,
- Affix a decal to each motor vehicle that is required to have the certificate, and
- File a quarterly highway use tax return even if no tax is due.
If you only occasionally operate a motor vehicle in New York State, you can get a trip certificate of registration instead of registering, obtaining a decal, and filing HUT returns. You may not use more than 10 trip certificates per year.
Oregon weight-mileage tax
Oregon’s weight-mile tax applies to vehicles in commercial operations on public roads within the state with a registered weight over 26,000 pounds. Motor carriers:
- With established accounts must enroll all weight-mile tax qualified vehicles under the account and pay the weight-mile tax on a monthly tax report,
- Without an established account must purchase and carry a temporary pass and be able to produce a legible paper or electronic copy, and
- Are responsible for all tax enrolled vehicles under the account, including leased or rented vehicles.
Carriers must file reports even if there is no tax owed for a particular reporting period.
In Oregon, this program is in lieu of fuel taxes under IFTA.
Then there’s the IRS ...
Finally, remember that the Heavy Vehicle Use Tax (HVUT), collected by the Internal Revenue Service (IRS), is yet another tax obligation. This program applies to highway motor vehicles with taxable gross weights of 55,000 pounds or more.
Know your tax obligations
Understanding that there’s more to use taxes than just IFTA can help keep you out of trouble in the four states with weight-mile/highway use taxes.