Motor carrier fuel/Highway use/Mileage tax - Kentucky

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.

Qualified motor vehicle does not mean a recreational vehicle, a motor vehicle registered as a farm vehicle in Kentucky or under another jurisdiction's law as a farm vehicle, or a motor vehicle used to transport persons for-hire.

All fuel usage of gasoline, special diesel, gasohol, and LPG in Kentucky must be reported on the quarterly IFTA tax return. Quarterly reports must be filed and are due on the last day of the month following the end of each calendar quarter. Carriers should contact their base jurisdiction where registered if a tax return is not received.

Kentucky charges a fuel surcharge for special fuel, diesel, and gasoline and the surcharge is paid on the IFTA quarterly return.

Fuel use tax

Carriers operating vehicles with a gross registered weight exceeding 26,000 pounds or vehicles with three or more axles regardless of weight intrastate-only in Kentucky must obtain Kentucky's Intrastate Tax (KIT) license. Intrastate carriers will be issued KIT decals that must be displayed on the lower rear exterior of the passenger side cab door and the lower rear exterior of the driver side cab door of each vehicle.

Quarterly, carriers must report fuel use and mileage in Kentucky and pay any tax due.

Carriers can access http://transportation.ky.gov/Motor-Carriers/Pages/TaxForms.aspx for more information.

Mileage/Highway use taxes

Carriers operating motor vehicles interstate or intrastate in Kentucky with a combined license weight in excess of 59,999 pounds are subject to Kentucky's weight-distance (KYU) tax. Farm-plated vehicles are exempt.

Carriers subject to the tax must obtain a KYU license by first obtaining a Business One Stop account with the state. Upon application for the KYU license, the carrier must provide a list of vehicles subject to the weight-distance tax.

One KYU license is issued for all units operated under the license. It is not necessary to display the KYU number on the vehicle; enforcement will be verified through the USDOT number. However, the KYU number must be displayed, in addition to the USDOT number, if the vehicle is leased and the lessor holds the KYU account and pays the KYU taxes. A copy of the lease agreement clearly defining who is paying for the KYU credential should be kept in the vehicle to avoid confusion.

Carriers are responsible for notifying the Kentucky Transportation Cabinet when there are vehicles added to or deleted from the list of vehicles subject to the weight-distance tax. The list of vehicles may be updated online at https://govnet1.ky.gov/wdt/.

Quarterly reports must be filed on or before the last day of the month following the close of the quarter (the KYU reports are separate from the IFTA returns). Reports are required even though no tax may be due. All licensees must maintain records for fuel purchases, consumption, and miles traveled for a period of five years. Reports may be filed online at http://transportation.ky.gov/motor-carriers/Pages/default.aspx.

Tax refunds or credits