Indiana IFTA Compliance and Fuel Tax Reporting Guide

The International Fuel Tax Agreement (IFTA) is a reciprocal agreement among the lower 48 U.S. states and 10 Canadian provinces to simplify the reporting of fuel use by motor carriers operating in multiple jurisdictions. In Indiana, the IFTA program is administered by the Indiana Department of Revenue (DOR) Motor Carrier Services (MCS) division. Carriers based in Indiana must register for an IFTA license if they operate qualified motor vehicles across state lines. A qualified motor vehicle is defined as a power unit having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds, a power unit having three or more axles regardless of weight, or a unit used in combination where the weight exceeds 26,000 pounds. Accurate record-keeping is the cornerstone of IFTA compliance, as carriers must track every mile driven and every gallon of fuel purchased by jurisdiction. Indiana requires these records to be maintained for four years from the filing date. Failure to report accurately or on time results in a penalty of $50 or 10% of the tax due, whichever is greater, plus interest. DispatchTool streamlines this process by automating mileage tracking by state line crossing and organizing fuel receipts for quarterly reports. Carriers can use these digitized logs to generate the data needed for the Indiana DOR Motor Carrier Services portal. Create a DispatchTool account to start tracking your jurisdictional mileage and fuel expenses for IFTA compliance.

Indiana IFTA Registration and Credentials

To register for IFTA in Indiana, a carrier must have an established place of business in the state, maintain operational control from an Indiana location, and have records available in the state. Applicants must file Form IFTA-1 (IFTA License Application) through the Indiana DOR’s online MCS system. There is no fee for the initial IFTA license or for the two required vehicle decals. However, carriers must renew their credentials annually. The 2024-2025 enforcement period requires decals to be displayed on both sides of the cab. Temporary permits are available for $50 if a carrier needs to operate immediately before receiving permanent decals, valid for 30 days.

Quarterly Filing Deadlines and Requirements

Indiana carriers are required to file IFTA tax returns quarterly, even if no taxable fuel was used or no miles were driven during the period. The deadlines are strictly enforced: Q1 (Jan-Mar) is due April 30; Q2 (Apr-Jun) is due July 31; Q3 (Jul-Sep) is due October 31; and Q4 (Oct-Dec) is due January 31. If the deadline falls on a weekend or legal holiday, the next business day is the recognized due date. Returns must be filed electronically through the Indiana MCS portal. Late filings incur a minimum penalty of $50, and interest is charged at a rate of 1% per month on the total tax underpayment for each jurisdiction.

Indiana Fuel Tax Rates and Surcharge

Indiana applies both a Motor Carrier Fuel Tax (MCFT) and a specific surcharge on diesel fuel. As of early 2024, the Indiana diesel tax rate is $0.57 per gallon, which includes the base tax and the adjusted surcharge under Indiana Code § 6-6-2.5. When filing the IFTA return, the Indiana DOR calculates the net tax due or credit by comparing the tax paid at the pump to the tax owed based on miles driven within the state. For example, if a truck drives 10,000 miles in Indiana at an average of 5.0 MPG, it owes tax on 2,000 gallons. If only 1,500 gallons were purchased in Indiana, the carrier must pay the tax difference on the remaining 500 gallons.

Record Keeping and Distance Accounting

Under Indiana DOR regulations, carriers must maintain Individual Vehicle Distance Records (IVDR). These records must include the date of the trip, trip origin and destination, total trip distance, and distance traveled in each jurisdiction. Odometer readings at state lines are the preferred method of documentation. For fuel, carriers must retain original receipts or invoices showing the date of purchase, name and address of the seller, number of gallons purchased, fuel type, and the price per gallon. Bulk fuel storage users have additional requirements, including withdrawals for each vehicle and inventory reconciliations. These records must be kept for 48 months to satisfy audit requirements.

IFTA Audits and Compliance Reviews

The Indiana Department of Revenue audits approximately 3% of its IFTA licensees annually to ensure compliance. An audit typically covers the previous eight quarters. If an audit reveals that records are inadequate, the DOR may impose a tax assessment based on an estimated average of 4.0 miles per gallon. This can result in significant back-tax liabilities and interest. Furthermore, Indiana Code § 6-8.1-10-2 states that if a deficiency is due to negligence, an additional 10% penalty may be applied. Carriers are notified at least 30 days in advance of an audit and must provide all IVDRs and fuel records for the specified period.

Sources

Indiana Department of Revenue - Motor Carrier Services (2024) — https://www.in.gov/dor/motor-carrier-services/fuel-tax/ International Fuel Tax Association, Inc. (2024) — https://www.iftach.org/ Indiana General Assembly - Indiana Code Title 6 Article 6 (2023) — https://iga.in.gov/laws/2023/ic/titles/6#6-6

Frequently asked

What is the penalty for late IFTA filing in Indiana?

The Indiana Department of Revenue charges a penalty of $50 or 10% of the total tax liability, whichever is greater. Interest is also applied at a rate of 1% per month on any unpaid balance until the full amount is settled.

Do I need an IFTA license if I only drive within Indiana?

No, if you operate exclusively within the state of Indiana, you do not need an IFTA license. However, you may still be subject to the Indiana Motor Carrier Fuel Tax (MCFT) if your vehicle exceeds 26,000 pounds GVW or has three axles.

How long must I keep my fuel receipts in Indiana?

According to the Indiana DOR and IFTA articles of agreement, you must maintain all fuel purchase records and distance logs for a period of four years from the date the tax return was filed.

What vehicles are exempt from IFTA in Indiana?

Exemptions include recreational vehicles used for personal pleasure, certain farm-registered vehicles used within specific mileage radiuses (though federal rules may vary), and government-owned vehicles. Always check Indiana Code Title 6, Article 6 for the most current exemption list.