Kentucky IFTA and Weight-Distance Tax Compliance

The Kentucky Transportation Cabinet (KYTC) manages fuel tax compliance through the International Fuel Tax Agreement (IFTA). Unlike most states that only require IFTA, Kentucky also mandates a heavy vehicle weight-distance tax known as the KYU. Motor carriers with vehicles exceeding 26,000 pounds gross vehicle weight (GVW) must obtain a KYU number and file quarterly taxes based on mileage traveled within state borders. IFTA reporting in Kentucky specifically covers the consumption of diesel, gasoline, and liquid fuels to ensure the state receives its proportional share of tax revenue for infrastructure maintenance. DispatchTool assists owner-operators in Kentucky by automating the aggregation of GPS trip data and electronic fuel receipts into formatted reports. This system tracks exact mileage across state lines, distinguishing between IFTA-governed jurisdictions and Kentucky’s unique weight-distance requirements to prevent overpayment of taxes. By centralizing these records, carriers can reduce the time spent on manual audits and ensure that tax filings match the operational data recorded in the field. Create a DispatchTool account to start managing your quarterly fuel tax records and automated mileage tracking today.

KYTC Registration and IFTA Eligibility

To register for IFTA in Kentucky, a carrier must have an established place of business in the state and be the base jurisdiction where operational control and records are maintained. According to the KYTC Department of Vehicle Regulation, a qualified motor vehicle is one used, designed, or maintained for the transportation of persons or property and meets specific criteria: having two axles and a GVW or registered GVW exceeding 26,000 pounds, having three or more axles regardless of weight, or being used in a combination that exceeds 26,000 pounds. The application for an IFTA license is submitted via the Kentucky One Stop Portal, and there is no fee for the initial IFTA license or the two required decals provided by the state.

The Kentucky Weight-Distance Tax (KYU)

Kentucky is one of four states that requires a separate weight-distance tax in addition to IFTA. Per Kentucky Revised Statute (KRS) 138.660(3), any motor carrier operating a vehicle with a combined licensed weight of 60,001 pounds or more must obtain a KYU number. The tax rate is calculated at $0.0285 per mile traveled on Kentucky public highways. Unlike IFTA, which focuses on fuel consumption, the KYU is strictly mileage-based. Failure to maintain a valid KYU number or falling behind on quarterly filings will result in the immediate suspension of the carrier's authority to operate within the state, often leading to roadside citations and vehicle impoundment.

Quarterly Filing Deadlines and Penalties

IFTA and KYU reports are due by the last day of the month following the close of each calendar quarter. The Q1 deadline is April 30, Q2 is July 31, Q3 is October 31, and Q4 is January 31. Under the IFTA Articles of Agreement, a late filing penalty of $50 or 10% of the net tax due, whichever is greater, is applied immediately upon missing the deadline. Interest accrues at a rate of 1% per month until the balance is paid. Kentucky also enforces a specific penalty for KYU non-compliance, where the Department of Revenue may assess a penalty of 20% of the tax due for failure to file or pay on time.

Record Keeping Requirements

The KYTC requires motor carriers to maintain detailed records for a minimum of four years from the filing date. These records must include summaries of monthly and quarterly fleet activity, as well as individual vehicle distance records (IVDR). Every trip must be documented with the starting and ending dates, trip origin and destination, routes of travel, beginning and ending odometer readings, and the total distance traveled in each jurisdiction. Fuel records must include original receipts or invoices showing the date of purchase, seller's name and address, number of gallons purchased, and the fuel type. Digital records are acceptable provided they are verifiable and represent the actual movement of the vehicle.

Kentucky Intrastate Tax (KIT)

Carriers that operate exclusively within the borders of Kentucky and do not cross state lines may be subject to the Kentucky Intrastate Tax (KIT) rather than IFTA. The KIT program applies to vehicles between 26,001 and 59,999 pounds that stay within state boundaries. However, most modern carriers opt for IFTA registration to maintain flexibility for interstate loads. If a carrier moves from KIT to IFTA, they must notify the KYTC to close their intrastate account to avoid duplicate tax assessments. The tax rates for KIT are generally aligned with the prevailing state fuel tax rates, currently updated annually by the Kentucky Department of Revenue.

Audit Procedures and Compliance

The International Fuel Tax Agreement requires Kentucky to audit 3% of its total IFTA licensee base every year to ensure reporting accuracy. During an audit, the state will compare the reported fuel purchases against the reported mileage to verify the Miles Per Gallon (MPG) calculations. If an audit reveals a discrepancy, such as missing fuel receipts or undocumented miles, the auditor will apply a standard '4.00 MPG' assessment, which typically results in a significant tax liability increase for the carrier. According to the ATRI, maintaining electronic logging device (ELD) data alongside fuel purchase integration is the most effective way to survive a state audit without fines.

Sources

Kentucky Transportation Cabinet (KYTC) (2024) — https://transportation.ky.gov/Motor-Carriers/Pages/IFTA.aspx Kentucky Revised Statutes (KRS 138.660) (2024) — https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=28340 International Fuel Tax Association (IFTA, Inc.) (2025) — https://www.iftach.org/

Frequently asked

What is the current KYU tax rate?

The KYU weight-distance tax rate is $0.0285 per mile for all vehicles with a registered weight of 60,001 pounds or more.

Do I need a KYU number if I am just driving through Kentucky?

Yes, if your vehicle exceeds 60,000 pounds, you must either have a permanent KYU number or purchase a temporary $40 trip permit before entering the state.

What are the IFTA late fees in Kentucky?

Kentucky imposes a $50 flat fee or 10% of the tax due (whichever is greater), plus interest at 1% per month on the unpaid balance.

How long should I keep my Kentucky fuel receipts?

Per IFTA and KYTC regulations, you must retain all fuel receipts and mileage records for a minimum of 4 years.