Determining the volume of fuel consumed in each jurisdiction is a critical step for compliance with the International Fuel Tax Agreement (IFTA). This calculation involves dividing the total miles driven within a specific state or province by the vehicle’s average fuel economy. For instance, if a truck travels 500 miles in State A and achieves an average of 5 miles per gallon, then 100 gallons are attributed to that state (500 miles / 5 mpg = 100 gallons).
Accurate fuel tax reporting ensures that states and provinces receive appropriate revenue for infrastructure maintenance and improvements. The IFTA agreement simplifies fuel tax reporting for interstate carriers, allowing them to file a single return rather than individual returns for each jurisdiction. This standardized system reduces administrative burden and promotes efficient tax collection, directly benefiting both the transportation industry and the jurisdictions involved.
