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Simply stated, IFTA works as a "pay now or pay later" system. As commercial motor vehicles buy fuel, any fuel taxes paid are credited to that licensee's account. At the end of the fiscal quarter, the licensee completes a fuel tax report, listing all miles traveled in all participating jurisdictions and lists all gallons purchased.
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The first US state to tax fuel was Oregon, introduced on February 25, 1919. [4] It was a 1¢/gal tax. [5] In the following decade, all of the US states (48 at the time), along with the District of Columbia, introduced a gasoline tax.
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Fuel taxes are often considered by government agencies such as the Internal Revenue Service as regressive taxes. [ 1 ] [ failed verification ] Fuels used to power agricultural vehicles, as well as home heating oil which is similar to diesel , are taxed at a different, usually lower rate.
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