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International Fuel Tax Agreement (IFTA)

IFTA applies to qualified vehicles operating in more than one IFTA jurisdiction. A qualified motor vehicle is a motor vehicle used, designed, or maintained for transportation of persons or property and that:

  • Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; or
  • Has three or more axles regardless of weight; or
  • Is used in combination, when the weight of such combination exceeds 26,000 pounds gross vehicle weight.

In Alabama, all quarterly IFTA tax returns must be filed electronically. If the tax owed is more than $750, then the payment must also be submitted electronically.

Mileage/highway use taxes

Motor carriers of persons for-hire are required to pay a mileage tax for use of public highways. The mileage taxes are assessed per mile according to the following:

Number of passengersTax Rate
9 to 16$.025
17 to 21.005
22 to 25.07
>25.01

The tax is payable monthly and is due on the 15th day of the month following the month in which the tax accrued. Tour bus and charter operations (that are in compliance with the International Registration Plan (IRP)) are exempt from the tax.

Tax refunds or credits

PTO/reefer fuel

A user is entitled to a refund for the use of undyed motor fuel in the following vehicles on which the fuel tax has been imposed and paid:

  • Vehicles used exclusively “off-the-highway.”
  • “Off-road equipment” that uses motor fuel for a purpose other than the generation of power to propel motor vehicles on a highway, such as tractors, bulldozers, mobile cranes, vessels, barges, ships, generators, boilers, reefers, and heating units.

Motor vehicles cannot be designated for both highway and off-the-highway use; a motor vehicle must be used exclusively off-the-highway to be eligible for fuel tax refunds. Tax credits are not allowed for off-highway fuel consumed from the same fuel tank used to propel the vehicle.

Claims can be filed for quarterly and must be made within two years of the diesel fuel purchase date.

When filing for refunds, all fuel purchases must be listed on the back of the form showing the date of withdrawal, equipment type (for example, “bulldozer”), equipment ID number, and number of gallons placed into the vehicle. Copies of the fuel receipts must be included with the refund application.

When the state motor fuel excise tax is refunded, sales tax becomes due. There is a space on the refund claim form to calculate sales tax due.

Bulk storage tank fuel does not need to be separated from on-road fuel as long as a log is kept of the fuel disbursements. The log sheet and invoices must be sent with the refund application.

View agency contact information.

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['Fleet Taxes']
['Highway use - Mileage tax']
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