Texas IFTA Fuel Tax Reporting and Compliance Guide

The International Fuel Tax Agreement (IFTA) is a tax collection agreement for redistributing fuel tax revenue among the 48 contiguous U.S. states and Canadian provinces. In Texas, the IFTA program is administered by the Texas Comptroller of Public Accounts. Carriers based in Texas that operate qualified motor vehicles in at least one other IFTA jurisdiction must register for a Texas IFTA license. A qualified motor vehicle is defined as a power unit used for transporting persons or property that has two axles and a gross vehicle weight (GVW) or registered GVW exceeding 26,000 pounds, has three or more axles regardless of weight, or is used in combination with a trailer for a total GVW exceeding 26,000 pounds. DispatchTool assists Texas-based carriers by automating the collection of GPS-based mileage data and fuel purchase records across multiple jurisdictions, reducing manual data entry errors for the quarterly Texas IFTA-736 report. The platform maps routes to ensure drivers stay on truck-safe corridors while capturing state-line crossings to the exact mile. To streamline your quarterly tax preparation, you can create a DispatchTool account to manage your fleet's fuel trip sheets and IFTA documentation in one centralized system.

Texas IFTA Registration and Licensing Fees

To register for IFTA in Texas, a carrier must have an established place of business in the state and mileage must be accrued in Texas. The Texas Comptroller does not charge an application fee for the IFTA license itself, nor is there a fee for the annual set of two decals required for each qualified vehicle. This distinguishes Texas from many other jurisdictions that charge between $10 and $50 per set. Licenses are valid for one calendar year, expiring on December 31. Renewals must be submitted via the Webfile system or Form AP-178. Carriers must display one decal on each side of the exterior of the cab. Failure to display valid decals can result in a fine of up to $500 per violation under Texas Tax Code Section 162.402.

Quarterly Reporting Deadlines and Penalties

Texas IFTA returns must be filed quarterly. The deadline is the last day of the month following the end of the quarter. For Q1 (Jan-Mar), the deadline is April 30; Q2 (Apr-Jun) is July 31; Q3 (Jul-Sep) is October 31; and Q4 (Oct-Dec) is January 31. If the deadline falls on a weekend or state holiday, the return is due the next business day. Per the Texas Comptroller, a late filing penalty of $50 or 10% of the net tax due, whichever is greater, is assessed. Interest is also charged on all late payments at a rate of 1% per month. Even if no taxable fuel was used or no miles were driven during a quarter, a 'zero' return must still be filed to maintain an active license.

Fuel Tax Rates and Calculations in Texas

As of 2025, the Texas state tax rate for both gasoline and diesel fuel is $0.20 per gallon. However, carriers must calculate their tax liability based on the prevailing rates in every jurisdiction they traveled through. For example, if a Texas-based truck drives through Pennsylvania, which has a significantly higher diesel tax rate (exceeding $0.70 per gallon), the carrier must pay the difference for fuel consumed in Pennsylvania that was purchased at the lower Texas rate. The calculation requires the total miles driven in all jurisdictions divided by the total gallons consumed to reach a fleet-wide Miles Per Gallon (MPG) figure. This MPG is then applied to the miles driven in each specific state to determine the taxable gallons for that jurisdiction.

Record Keeping and Audit Requirements

Texas IFTA licensees are required to maintain detailed records for four years from the date the tax return was due or filed, whichever is later. According to the Texas Comptroller, these records must include Daily Driver Trip Reports (DDTR) showing beginning and ending odometer readings, routes of travel, and fuel receipts. Fuel receipts must show the date of purchase, seller name and address, number of gallons purchased, and the vehicle unit number. The Comptroller’s office conducts audits to ensure compliance. If records are deemed inadequate, the auditor may apply a standard MPG of 4.0 for the entire fleet, which often results in a significant tax assessment and additional penalties for the carrier.

Exemptions and Non-Taxable Miles

Texas allows for certain fuel tax exemptions, though they are strictly regulated. Fuel used in Power Take-Off (PTO) equipment, such as cement mixers or garbage trucks, may be eligible for a refund or credit if the fuel is drawn from the main supply tank but not used for propulsion. Texas also recognizes specific off-highway miles as non-taxable if documented correctly. However, it is critical to note that not all IFTA jurisdictions recognize the same exemptions. A mile driven on a private road in Texas might be exempt from Texas state tax, but the total miles must still be reported to maintain the accuracy of the fleet's MPG calculation for other states that do not recognize such exemptions.

Electronic Filing via Texas Webfile

The Texas Comptroller of Public Accounts requires carriers to file their IFTA-736 reports electronically through the Webfile system if they paid $50,000 or more in total taxes during the preceding fiscal year. However, electronic filing is encouraged for all carriers to ensure faster processing and immediate confirmation. To use Webfile, carriers must obtain a 11-digit Texas Taxpayer Number and a 6-digit Webfile Navigation Code. Payments can be made via Electronic Funds Transfer (EFT), credit card (which incurs a 2.25% processing fee), or check. When filing, the system automatically calculates the net tax due or credit based on the data entered for each jurisdiction.

Sources

Texas Comptroller of Public Accounts (2024) — https://comptroller.texas.gov/taxes/fuels/ifta.php International Fuel Tax Association, Inc. (2025) — https://www.iftach.org/ Texas Tax Code Section 162 (2023) — https://statutes.capitol.texas.gov/Docs/TX/htm/TX.162.htm

Frequently asked

What is the penalty for filing a late IFTA return in Texas?

The Texas Comptroller imposes a penalty of $50 or 10% of the net tax due, whichever is greater. Additionally, interest is charged at 1% per month on any unpaid tax balance until the amount is cleared.

How long do I need to keep my fuel receipts and logbooks for Texas IFTA?

You must retain all IFTA-related records, including fuel receipts and trip reports, for a period of four years. This timeframe allows the Texas Comptroller to conduct audits of past filings to ensure compliance with the agreement.

Does Texas charge for IFTA decals?

No, Texas is one of the few states that does not charge a fee for the annual IFTA license or the two decals required for each qualified vehicle. However, you must be in good standing with all state taxes to receive them.

What weight qualifies a vehicle for IFTA in Texas?

A vehicle qualifies for IFTA if it has a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds, or if it has three or more axles regardless of its weight.

Can I get a refund if I overpaid my fuel taxes?

Yes, if your quarterly report shows a net credit—meaning you purchased more tax-paid fuel in certain states than you consumed—you can apply that credit to future quarters or request a refund check from the Texas Comptroller.