The International Fuel Tax Agreement (IFTA) is an agreement between all 48 contiguous states, and 10 Canadian provinces. It enables participating jurisdictions to cooperate in the collection and administration of motor fuel taxes. An IFTA account is set up with the base state, which authorizes travel in all IFTA jurisdictions. Then a single quarterly report must be filed with the base state, reporting miles traveled and fuel purchased in each state. The base state is responsible for dispersing the funds to the other jurisdictions. You need an IFTA license if you travel in two or more member jurisdictions, and if your vehicle either weighs more than 26,000 pounds, OR has three or more axles, regardless of weight.

A fuel tax liability is created when the amount of fuel consumed is larger than the amount of fuel purchased in a particular state during any one-tax quarter. If the state charges a fuel surcharge over and above the specific fuel tax levied, it will generally be charged on the total amount of fuel consumed within that state during that same quarter regardless of the amount of fuel purchased within that same state. Anytime there is more fuel purchased than consumed in a particular state during a tax quarter a fuel tax credit is created and is used to offset any fuel tax liability during that same quarter.