Maryland IFTA Compliance and Fuel Tax Reporting

The International Fuel Tax Agreement (IFTA) is a reciprocal agreement between the lower 48 U.S. states and Canadian provinces that simplifies the reporting of fuel use by motor carriers. In Maryland, the IFTA program is administered by the Comptroller of Maryland, Revenue Administration Division. Carriers based in Maryland must obtain a license and decals if they operate a qualified motor vehicle in at least one other IFTA jurisdiction. A qualified vehicle is defined by the Comptroller as a motor vehicle used, designed, or maintained for the transportation of persons or property that has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds, has three or more axles regardless of weight, or is used in combination when the weight of such combination exceeds 26,000 pounds. Adhering to Maryland’s specific reporting windows and record-keeping mandates is essential to avoid interest penalties and license revocation. DispatchTool streamlines this process by automatically tracking jurisdiction-specific mileage and fuel purchases, generating the data summaries required for Maryland's quarterly tax returns. By centralizing GPS trip data and digitized fuel receipts, the platform reduces the manual labor involved in reconciling Maryland Route 200 or I-95 mileage with out-of-state travel. Carriers can use these accurate summaries to complete their filings on the Maryland TaxConnect portal and should create a DispatchTool account to automate their IFTA mileage logs.

Maryland IFTA Registration and Fees

To participate in IFTA, Maryland-based carriers must submit Form IFTA-1, the Maryland IFTA License Application, to the Comptroller of Maryland. Unlike some states that offer free decals, Maryland charges an annual fee of $8.00 per set of two decals. One decal must be placed on the exterior of each side of the vehicle’s cab. The IFTA license is valid for one calendar year, from January 1 through December 31. New carriers must also provide proof of an established place of business in Maryland or demonstrate that their operational records are maintained or can be made available within the state. Failure to display a valid decal or carry a copy of the IFTA license can result in citations and fines ranging from $100 to $500 depending on the specific violation and enforcement officer discretion.

Quarterly Filing Deadlines and Penalties

Maryland IFTA returns must be filed quarterly, with the due date falling on the last day of the month following the close of the reporting period. The four deadlines are April 30 (Q1), July 31 (Q2), October 31 (Q3), and January 31 (Q4). If the due date falls on a weekend or state holiday, the deadline is extended to the next business day. The Comptroller of Maryland mandates that all returns be filed even if no taxable fuel was used during the quarter. Late filings are subject to a penalty of $50.00 or 10% of the total tax due, whichever is greater. Furthermore, interest is charged on all late payments at a rate of 1% per month, calculated from the date the tax was originally due until the date the payment is received.

Distance and Fuel Record Keeping

The Comptroller of Maryland requires carriers to maintain detailed records to support their IFTA filings for a minimum of four years from the filing date. These records must include the total distance traveled in all jurisdictions and the total distance traveled specifically in Maryland. Documentation must consist of Individual Vehicle Distance Records (IVDR), which detail the trip date, origin, destination, route of travel, and beginning and ending odometer readings. For fuel, carriers must keep original receipts or invoices showing the date of purchase, name and address of the seller, number of gallons purchased, and the vehicle unit number. Credit card summaries are generally not acceptable substitutes for individual receipts unless they provide the specific line-item detail required by the IFTA Articles of Agreement.

Calculating Maryland Fuel Tax Credits

Maryland’s fuel tax rates are adjusted annually based on the Consumer Price Index and are published by the Comptroller. When a carrier purchases more fuel in Maryland than they consume within the state, they accrue a fuel tax credit. This credit can be applied to tax liabilities in other IFTA jurisdictions on the same quarterly return. If the credit exceeds the total tax due, the carrier may request a refund or carry the credit forward to future quarters. However, credits expire eight quarters (two years) after the end of the period in which the credit was earned. It is critical to accurately report 'tax-paid' gallons, which are gallons purchased at the pump including the Maryland motor fuel tax, to ensure the credit is calculated correctly.

Audit Selection and Compliance Procedures

Under the IFTA agreement, the Maryland Revenue Administration Division is required to audit 3% of its licensed base every year to ensure compliance. Audits focus on verifying the accuracy of reported mileage and fuel purchases. If an audit reveals that a carrier’s records are inadequate, the Comptroller may impose a tax assessment based on a standard of 4.0 miles per gallon for the entire fleet. Additionally, the carrier may lose their IFTA license, requiring them to purchase expensive single-trip fuel permits for every state they enter. Maintaining digitized, time-stamped logs and verified GPS data is the primary method for defending against these assessments during a Maryland DOT or Comptroller audit.

IFTA Exemptions in Maryland

While most heavy vehicles must comply with IFTA, Maryland provides specific exemptions for certain vehicle types and operations. Vehicles owned by the United States government, the State of Maryland, or any political subdivision of the state are exempt from IFTA licensing. Additionally, Maryland does not require IFTA for recreational vehicles used strictly for personal pleasure. Some specific non-highway equipment, such as vehicles used exclusively for farming or forestry that only cross highways occasionally, may also be exempt from certain fuel tax requirements. However, once an exempt vehicle crosses state lines for a commercial purpose, it generally falls back under the 26,000-pound IFTA threshold.

Sources

Comptroller of Maryland - Motor Fuel Tax (2024) — https://www.marylandtaxes.gov/business/motor-fuel/index.php IFTA, Inc. Maryland State Page (2025) — https://www.iftach.org/ Maryland General Assembly - Tax-General Code § 9-201 (2024) — https://mgaleg.maryland.gov/mgawebsite/Laws/Statutes

Frequently asked

How much does a Maryland IFTA decal cost?

Maryland charges $8.00 per set of decals. Each qualified vehicle requires one set, and licenses must be renewed annually before the December 31 expiration date.

What is the penalty for filing my Maryland IFTA return late?

The penalty is $50.00 or 10% of the tax due, whichever is higher. Additionally, interest is applied at a rate of 1% per month until the balance is paid.

Can I file my Maryland IFTA returns online?

Yes, Maryland requires carriers to file their quarterly returns electronically through the Maryland TaxConnect portal, which replaced the previous bFile system for motor fuel taxes.

How long must I keep IFTA records in Maryland?

You must retain all mileage logs, fuel receipts, and quarterly summaries for at least 4 years from the date the return was filed or due, whichever is later.

Do I need IFTA if I only drive within Maryland?

No, if your 26,000+ lb vehicle never leaves the state of Maryland, you do not need an IFTA license. You only need IFTA if you operate in Maryland and at least one other IFTA jurisdiction.