How trucking fuel tax works: paid at the pump, settled by the mile
Fuel tax is charged at the pump, but it isn't settled there. The federal tax stays in the price, state tax follows your miles, and some states add charges of their own.
Trucking fuel tax in numbers
Trucking fuel tax comes in layers. The federal diesel tax of 24.4 cents a gallon is built into the pump price and stays there. State fuel tax is also paid at the pump, then settled every quarter on your IFTA return, based on the miles you drove in each state.
Most carriers think of fuel tax as the IFTA return. The return is only the part you file. Every gallon also carries a federal tax that never appears on a form, and some states charge again, by the gallon or by the mile.
This guide maps each layer: what it costs, who collects it, and how it is settled, so you can see what you actually owe and what you can get back.
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Key takeaways
The federal tax stays in the pump price
Diesel carries 24.4 cents a gallon of federal tax. There is nothing to file for it, and IFTA never touches it.
State fuel tax follows your miles
You pay it where you fuel, and the quarterly IFTA return moves it to the states where the fuel was burned.
Cheap fuel doesn't cut your tax
Where you buy changes when you pay, not how much. The return charges each state's rate on the gallons used there.
Some states charge on top
Kentucky and Virginia add a surcharge paid only on the return. Kentucky, New Mexico, New York, Oregon, and Connecticut tax heavy trucks by the mile.
Reefer fuel can earn a credit
Diesel burned in a separate motor, such as a reefer unit, can qualify for a federal credit of 24.3 cents a gallon.
In this articleContents
What fuel taxes do truckers pay?
Truckers pay a federal and a state fuel tax on every gallon of diesel, and both are built into the pump price. Some states add a surcharge or a separate tax based on weight and miles.
| Tax | Who sets it | How you pay it |
|---|---|---|
| Federal diesel excise tax, 24.4 cents a gallon | Congress; collected by the IRS | In the pump price; nothing to file |
| State and provincial fuel tax | Each state and province | At the pump, then settled by miles on your quarterly IFTA return |
| IFTA surcharge (Kentucky, Virginia) | The state | Only on the IFTA return, on gallons used in that state |
| Weight-distance tax (KY, NM, NY, OR, CT) | The state | Its own account and return, based on miles and weight |
| Heavy vehicle use tax (Form 2290) | Congress; collected by the IRS | Once a year, by the truck's weight, not by the gallon |
The federal rate is 24.3 cents a gallon plus a 0.1-cent Leaking Underground Storage Tank tax, 24.4 cents in total. It is generally charged when diesel leaves the fuel terminal, so it is already in the price you pay, and the money goes to the Highway Trust Fund.
Because the federal tax is settled before the fuel reaches you, the rest of this guide is about the state layers, which are the ones you report.
How do commercial drivers pay fuel tax?
Commercial drivers pay trucking fuel tax at the pump, to the state where they buy the fuel. Each quarter, the carrier's IFTA return moves that tax to the states where the fuel was actually burned.
IFTA, the International Fuel Tax Agreement, covers the 48 contiguous states and the 10 Canadian provinces. A carrier based in a member jurisdiction that runs a qualified motor vehicle in two or more of them holds one IFTA license and files one return with its base jurisdiction.
A qualified motor vehicle has two axles and weighs over 26,000 pounds, has three or more axles at any weight, or runs in a combination over 26,000 pounds. The return settles the tax in four moves:
- Divide total miles by total gallons to get your fleet MPG.
- Divide the miles in each state by that MPG to get the gallons used there.
- Subtract the tax-paid gallons you bought in that state.
- Multiply what is left by the state's rate: a positive result is tax owed, a negative one is a credit.
A credit in one state offsets tax owed to another on the same return. Credits left over carry forward for up to eight quarters, or you can ask your base jurisdiction for a refund.
Due dates, records, and penalties are in our guide to IFTA quarterly returns. Trucks without an IFTA license buy a temporary fuel permit for each state instead.
Does buying cheap fuel lower your tax?
No. IFTA taxes fuel where it is burned, so where you fill up changes when you pay, not how much.
For example, a truck buys 200 gallons in Oklahoma, paying 19 cents a gallon at the pump, then burns all of it running 1,200 miles in Pennsylvania at 6.00 MPG. The return credits back the $38.00 paid to Oklahoma and charges Pennsylvania's 74.1 cents on those 200 gallons: $148.20. You end up paying Pennsylvania's rate, wherever the diesel was bought.
What fueling strategy does change is cash flow. Low-tax fuel means a bigger payment with the return; high-tax fuel means credits you wait to use.
Which states charge more than a fuel tax?
Two states add an IFTA surcharge, and five charge a weight-distance tax that sits outside IFTA entirely.
What is an IFTA fuel surcharge?
A surcharge is an extra tax on each taxable gallon used in a state. It isn't collected at the pump, so no tax-paid gallons offset it: you pay all of it on the IFTA return, on its own line. For the third quarter of 2026, Kentucky's diesel surcharge is 10.5 cents a gallon and Virginia's is 14.3 cents.
It has nothing to do with the fuel surcharge on a freight bill, which is a pricing term between you and your customer.
Which states have a weight-distance tax?
Five states tax heavy trucks by the mile, through their own accounts and returns.
| State and tax | Applies to | Charged by |
|---|---|---|
| Kentucky, KYU | Combined license weight over 59,999 lb | 2.85 cents a mile |
| New Mexico, weight distance tax | Declared gross weight or GVW over 26,000 lb | Miles, at a rate set by weight |
| New York, highway use tax | Gross weight over 18,000 lb | Miles, at a rate set by weight and reporting method |
| Oregon, weight-mile tax | Combined gross weight over 26,000 lb | Miles, at a rate set by weight |
| Connecticut, highway use fee | 26,000 lb or more, FHWA Class 8 to 13 | 2.5 to 17.5 cents a mile, by weight |
Kentucky, New Mexico, New York, and Connecticut all require returns even for periods with no miles in the state. Our guides to the Kentucky KYU license and Oregon trip permits and weight-mile tax cover two of them in detail.
Oregon's IFTA diesel rate is zero because heavy trucks there pay the weight-mile tax instead. Our trucker tax preparation team files fuel taxes and weight-distance taxes for Kentucky, New York, New Mexico, and Oregon.
Is there a fuel tax credit for truck drivers?
Yes, but only for fuel that doesn't move the truck. The federal credit covers diesel used off-highway in a business, which the IRS says includes a separate motor running a refrigeration unit, pump, generator, or mixing unit.
Fuel burned in the truck's own engine never qualifies, even when a power take-off runs equipment. The IRS example is a concrete mixer turned by the truck's engine: no credit.
If the reefer draws from the same tank as the engine, you must work out its share and support it with records. In the IRS example, a hubometer shows 90% of the fuel moved the truck, so the other 10% qualifies.
- The credit is 24.3 cents a gallon of undyed diesel. The 0.1-cent storage tank tax is generally not refunded.
- Under $750 for the year, you claim it only as a credit on Form 4136 with your income tax return. Larger amounts can be claimed as refunds during the year on Form 8849.
- If you deducted the full cost of the fuel, the credit or refund counts as income.
- Dyed diesel is for nontaxable uses only. Using it on the highway carries a penalty of $1,000 or $10 a gallon, whichever is greater.
Fuel taxes aren't a separate income tax deduction either: the IRS treats them as part of what the fuel cost you. Our trucker tax deductions guide covers the rest.
What is changing in trucking fuel taxes?
State rates change often, so last year's rate is rarely this quarter's. Between the fourth quarter of 2025 and the third quarter of 2026, 17 U.S. states changed their IFTA diesel rate, by our count of IFTA, Inc.'s quarterly rate files.
- Up: New Jersey from 51.9 to 56.1 cents, Mississippi from 21 to 24 cents, California from 97.1 to 97.9 cents.
- Down: Illinois from 74.9 to 73.8 cents, Utah from 38.5 to 37.9 cents, New York from 38.75 to 38.05 cents.
Among states that tax diesel at the pump, third-quarter 2026 rates run from 19 cents in Oklahoma to 97.9 cents in California. The fourth-quarter matrix isn't final until December 4, 2026.
Oregon is changing the most. On July 1, 2027, its weight-mile tax drops from 85 rates to 10, and tax weight becomes registered weight. On July 1, 2029, heavy trucks start paying diesel tax with a reduced weight-mile tax, and Oregon becomes a full IFTA participant, collecting IFTA taxes from all carriers.
The federal rate of 24.3 cents is set in law through September 30, 2028.
How Simplex helps with trucking fuel taxes
Fuel tax touches your quarterly returns, your state accounts, and your permits. We handle each one.
Fuel and weight-distance returns
Our trucker tax preparation team covers fuel taxes, weight-distance taxes for Kentucky, New York, New Mexico, and Oregon, 2290 road taxes, and reefer fuel refunds.
Temporary fuel permits
Not IFTA-licensed yet, or crossing a state only now and then? Our trucking permits team handles temporary fuel (IFTA) permits and IRP trip permits.
IFTA licensing for new carriers
Starting out? Our authority packages can bundle IFTA licensing and IRP apportioned plates with your USDOT and MC setup.
Frequently asked questions
What fuel taxes do truckers pay?+
How do commercial drivers pay fuel tax?+
What is IFTA in trucking?+
Is there a fuel tax credit for truck drivers?+
Is the IFTA surcharge the same as a fuel surcharge on a freight bill?+
Which states charge a weight-distance tax?+
Where this information comes from
The rates and rules below come from federal law, the IRS, IFTA, Inc., the Texas Comptroller as an example base jurisdiction, and state tax and transportation agencies, checked on September 24, 2026.
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1
U.S. Code — 26 U.S.C. 4081
The 24.3-cent diesel rate, the 0.1-cent LUST tax, and the September 30, 2028 date (laws in effect September 23, 2026).
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2
IRS — Publication 510, Excise Taxes
The $0.244 tax, off-highway business use, separate motors, the $750 rule, the 24.3-cent credit, and the dyed diesel penalty.
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3
IFTA, Inc. — Carrier Information
The 58 member jurisdictions, who must hold a license, the qualified motor vehicle test, and the base jurisdiction.
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4
IFTA, Inc. — Articles of Agreement (August 2026)
R1100 to R1120: full credit for tax-paid fuel, refunds, and the eight-quarter carry-forward; R960 due dates.
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5
IFTA, Inc. — Tax Rate Matrix
Quarterly diesel rates and surcharges for every member, including the 3Q 2026 files and the 4Q 2026 finalization date.
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6
Texas Comptroller — Form 56-102 instructions
How the IFTA return is calculated, and how surcharges are paid on the return instead of at the pump.
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7
ODOT — CCD Modernization Projects
Oregon's July 1, 2027 weight-mile tax simplification and the July 1, 2029 diesel tax and full IFTA participation.
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8
Connecticut DRS — Highway Use Fee
Who owes the fee, the 2.5 to 17.5 cents a mile rates, and quarterly returns even without Connecticut miles.
Written by
Simplex Group
Permits & Fuel Tax Team, Simplex Group
Reviewed for technical accuracy by a Simplex permitting manager before publication. Simplex has registered and filed permits and fuel taxes for interstate carriers across all 50 states for more than 20 years.
Published · Updated
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Know which layer of fuel tax you are paying
The third quarter closed on September 30. Its IFTA return is due Monday, November 2, 2026, because October 31 falls on a Saturday.
If you want help with your IFTA return, your state mileage taxes, or a reefer fuel refund, talk to our team.