Where to Buy Diesel: How IFTA Tax Rates Shape What You Really Owe
WheelsAndAxle TeamFebruary 22, 202612 min read
All rates in this post are sourced from Q1 2026 diesel rates published on state .gov websites and the IFTA Inc Tax Rate Matrix. Tax rates change each quarter — always check the linked sources for the latest numbers before you make any choices.
The One Thing Most Drivers Get Wrong
You pull into a truck stop on I-80 in Ohio. Diesel is $4.05 a gallon. You just drove past a station in Pennsylvania where it was $4.45. You feel good — you "saved" forty cents a gallon.
But did you?
That pump price is not your true cost. It has two parts baked in: the raw price of the fuel (what the truck stop pays for it) and the state fuel tax (what the state tacks on). IFTA does not care where you buy your fuel. At the end of the quarter, IFTA settles up the tax based on where you drove, not where you filled up.
So the only part of the pump price that stays in your pocket is the base price — the raw cost of the diesel itself, with the state tax stripped out.
This post walks through two real routes with real Q1 2026 tax rates. We will show you the math, dollar for dollar, so you can see for yourself how IFTA works — and where the real savings hide.
How IFTA Settles the Tab
Here is the short version:
Every state sets a fuel tax rate. Some are high (Pennsylvania: $0.741/gal). Some are low (South Carolina: $0.280/gal).
When you buy diesel, you pay that state's tax at the pump. This goes on your IFTA return as a credit.
When you drive through a state, you owe that state's tax on the fuel you burned there. IFTA works this out from your miles and your fleet MPG.
At the end of the quarter, IFTA squares up. If you bought fuel in a low-tax state but drove in a high-tax state, you owe the gap. If you bought in a high-tax state but drove in a low-tax state, you get money back.
The bottom line: IFTA makes the tax part a wash. Over the quarter, you pay the same total tax no matter where you fill up. The only thing that changes your real cost is the base price of the fuel — the raw cost before tax.
The Six States We Will Cover
Here are the Q1 2026 diesel IFTA rates for the states on our two routes:
Rates from IFTA Inc Tax Rate Matrix (iftach.org) and state .gov websites, Q1 2026.
Notice something: Virginia and Ohio have the same total rate ($0.470) — but Virginia gets there in a very different way. We will come back to that.
Scenario A: The I-80 Run (PA → OH → IN)
The Setup
You run a load from eastern Pennsylvania to central Indiana on I-80. Your route:
500 miles in Pennsylvania (PA tax: $0.741/gal)
500 miles in Ohio (OH tax: $0.470/gal)
500 miles in Indiana (IN tax: $0.610/gal)
Your fleet MPG is 5.0. That means you burn 100 gallons in each state — 300 gallons for the whole run.
The Choice
You see diesel for $4.45/gal in Pennsylvania and $4.15/gal in Indiana. You think: "I will save thirty cents a gallon if I fill up in Indiana." So you buy all 300 gallons in Indiana.
The Math — What You Paid at the Pump
Where You Filled
Gallons
Pump Price
Tax at Pump
You Paid
Indiana
300
$4.15
$0.610/gal
$1,245.00
Tax paid at the pump: 300 × $0.610 = $183.00 (this is your IFTA credit).
Now strip the tax and look at the base price — what the fuel actually costs before the state takes its cut:
Station
Pump Price
Tax
Base Price
Pennsylvania
$4.45
$0.741
$3.709
Indiana
$4.15
$0.610
$3.540
The base price gap is $0.169/gal — not the $0.30 you saw on the pump sign.
Filled Where
Pump Cost
IFTA Adjustment
True Cost
All in Indiana
$1,245.00
−$0.90
$1,244.10
All in Pennsylvania
$1,335.00
−$40.20
$1,294.80
Real Savings
$50.70
You saved $50.70 — which is exactly 300 gallons × $0.169 base price gap. Not the $90.00 you thought you were saving from the pump price gap.
The Takeaway
IFTA settled the tax. The only real savings came from the lower base price in Indiana. The pump price lied to you — it told you the gap was $0.30, but IFTA clawed back the tax spread. Your real savings was $0.169 per gallon.
The rule: Strip the tax. Compare the base price. That is what you keep.
What If You Filled in Ohio?
Ohio has the lowest tax on I-80 at $0.470/gal. But if Ohio's pump price is $4.05:
Station
Pump Price
Tax
Base Price
Ohio
$4.05
$0.470
$3.580
Base price: $3.580. That is between PA ($3.709) and IN ($3.540). So Ohio looks cheap at the pump but is the middle of the pack on base price. Indiana's raw fuel is still cheaper — the "savings" at Ohio's pump come mostly from its lower tax, which IFTA will settle up later anyway.
Scenario B: The I-95 Southern Run (VA → NC → SC)
The Setup
You haul freight down the I-95 corridor from Virginia to South Carolina:
400 miles in Virginia (VA total rate: $0.470/gal)
300 miles in North Carolina (NC rate: $0.410/gal)
300 miles in South Carolina (SC rate: $0.280/gal)
Fleet MPG: 5.0. Gallons burned: 80 in VA, 60 in NC, 60 in SC — 200 gallons total.
The Choice
You are low on fuel in North Carolina. The truck stop shows $4.15/gal. You know South Carolina is 50 miles ahead and usually has the cheapest diesel in the South — $3.95/gal on the sign.
Do you push on to South Carolina?
The Base Price Check
State
Pump Price
Tax Rate
Base Price
North Carolina
$4.15
$0.410
$3.740
South Carolina
$3.95
$0.280
$3.670
South Carolina wins on both the pump price and the base price. The base price gap is $0.070/gal. Over 200 gallons, that is $14.00 in real savings. IFTA will handle the tax difference — the $14.00 is yours to keep.
In this case, yes — push on to South Carolina. But know that your savings is $14.00, not the $40.00 the pump signs suggest.
But Here Is the Catch: Virginia's Surcharge
Look at Virginia's rate again: $0.327 base + $0.143 surcharge = $0.470 total.
That surcharge has a special rule: it is never collected at the pump. When you buy diesel at a truck stop in Virginia, the pump price only includes the $0.327 base tax. You get credit for $0.327 on your IFTA return — not $0.470.
The $0.143 surcharge is a separate line on your quarterly return. It is worked out on every gallon you burned in Virginia, and you owe it no matter where you bought your fuel. There is no credit to offset it. It is always money out of your pocket at filing time.
Per the Virginia DMV's IFTA instructions (Form RDT 121-I):
"Surcharges are not collected at the pump; and you cannot claim 'Tax Paid Gallons' on a surcharge line."
The Surcharge Math
You burned 80 gallons in Virginia this run:
Virginia Component
Rate
Gallons
Amount
Base tax owed
$0.327
80
$26.16
Base tax credit (if fueled in VA)
$0.327
80
−$26.16
Surcharge — always owed
$0.143
80
$11.44
Even if you buy every drop of diesel in Virginia, you still owe $11.44 in surcharge at the end of the quarter for this one run alone. The surcharge is a fixed cost of driving in Virginia. You cannot dodge it. You cannot offset it. Plan for it.
Which States Have Diesel Surcharges?
As of Q1 2026, only two states carry a diesel surcharge on the IFTA matrix:
Every other state's IFTA rate is a flat rate collected at the pump — no hidden add-ons.
A note on Kentucky: On top of the $0.105 IFTA surcharge, Kentucky also has a separate KYU weight-distance tax based on gross weight and miles driven. The KYU is a wholly different filing — it is not part of IFTA at all. We covered it in detail in our weight-distance tax post. For IFTA purposes, just budget for the $0.105 surcharge on your quarterly return.
If you run miles in Virginia or Kentucky, budget for the surcharge. It will show up on your quarterly return as a line item with no credit against it.
How to Figure the Base Price at the Pump
You do not need a spreadsheet. Here is the quick way:
Look at the pump price (e.g., $4.15 in Indiana).
Look up the state's IFTA rate on the IFTA Tax Rate Matrix — use the base rate, not the surcharge.
Subtract: $4.15 − $0.610 = $3.540 base price.
Do the same for the other truck stop.
The lower base price is the better deal. IFTA will settle the tax part for you.
A few things to keep in mind:
Pump prices shift daily. The base price gap between two stations can flip from one week to the next.
IFTA rates shift quarterly. Always check the current quarter's matrix — rates can go up or down.
Do not run on fumes to chase a base price. A roadside breakdown costs far more than any fuel savings. If you need fuel, buy fuel.
Surcharges are a fixed cost. If you drive in Virginia or Kentucky, you will owe the surcharge no matter what. There is no way to fuel around it.
A Note on Indiana — Setting the Record Straight
You may see old blog posts or forum threads that say Indiana has a diesel surcharge. That has not been true since July 1, 2018.
Indiana repealed its Motor Carrier Surcharge Tax through HEA 1290-2018. The surcharge was folded into the base excise tax, which rose from $0.26/gal to $0.47/gal at that time. It has since climbed to $0.610/gal through Indiana's yearly rate formula.
Today, Indiana's $0.610 rate is a single flat rate — fully collected at the pump, fully credited on the IFTA return. No hidden surcharge. No extra line item. The only fuel type that still carries an Indiana surcharge is propane ($0.610 surcharge, separate from its base rate).
Summary: Three Rules for Smarter Fuel Stops
Rule 1: Strip the tax, compare the base.
The pump price includes state fuel tax. IFTA will settle that tax at the end of the quarter based on where you drove, not where you filled up. The only part of the pump price that stays in your wallet is the base price — the raw cost of the diesel. Compare that, not the number on the sign.
Rule 2: Budget for surcharges in VA and KY.
Virginia ($0.143/gal) and Kentucky ($0.105/gal) tack a surcharge onto their IFTA rates. This surcharge is never at the pump and never earns you a credit. It is a fixed cost of driving in those states. Know it is coming so your quarterly bill does not catch you off guard.
Rule 3: Do not make safety choices based on tax math.
Running low on fuel to chase a base price that is a few cents cheaper in the next state is not worth the risk. A tow truck costs more than a tank of diesel. Fill up when you need to. Make base-price choices when you have the luxury of a full tank and two truck stops in range.
WheelsAndAxle is a preparation tool, not a tax advisor, CPA, or filing service. We do not file IFTA returns on your behalf. You are solely responsible for verifying all figures with your base jurisdiction before filing. Always check the linked .gov sources for the latest rates before you act.
Sources
All rates are Q1 2026 (January–March 2026) diesel IFTA rates:
Disclaimer: WheelsAndAxle generates IFTA worksheets as preparation aids only. We are not a tax advisor, CPA, or filing service. Users bear sole responsibility for verifying all figures with their base jurisdiction before filing.