What Is the Indiana Gasoline Use Tax?
Understand Indiana's gasoline use tax, a system ensuring commercial carriers pay for road use based on miles driven, not just fuel purchased in the state.
The Indiana Motor Carrier Fuel Tax (MCFT) is a levy applied to motor carriers, separate from the excise tax paid by consumers at the pump. This tax is not based on where fuel is purchased but on the amount of fuel consumed by specific commercial vehicles while operating on Indiana highways. The purpose of this structure is to ensure that all heavy vehicle operators contribute to the maintenance and funding of the state’s road infrastructure, regardless of where they choose to refuel.
Determining Who is Subject to the Tax
The responsibility for paying the motor carrier fuel tax falls upon entities defined as “carriers” operating “qualified motor vehicles.” A carrier is any person or business that operates these specific vehicles on Indiana highways. A vehicle is considered a qualified motor vehicle if it is used for transporting people or property and meets certain weight or axle specifications.
A vehicle qualifies if it has a gross vehicle weight or registered gross weight exceeding 26,000 pounds. A combination of vehicles, such as a tractor and trailer, also qualifies if their combined gross weight or registered weight is over 26,000 pounds. A vehicle with three or more axles on the power unit is subject to the tax, regardless of its weight. These rules apply to carriers that operate across state lines, known as interstate carriers, as well as those that operate exclusively within Indiana, referred to as intrastate carriers.
Required Licensing and Registration
Before a carrier can remit any fuel use tax, it must obtain the proper credentials from the Indiana Department of Revenue. The specific license required depends on the carrier’s scope of operations. The state provides two distinct paths for licensing to accommodate different types of carriers.
For carriers operating in Indiana and at least one other state or Canadian province, participation in the International Fuel Tax Agreement (IFTA) is necessary. IFTA is a cooperative agreement among jurisdictions to simplify the reporting of fuel use taxes by interstate motor carriers. A carrier obtains a single IFTA license from its base jurisdiction, which allows it to operate in all member jurisdictions. For carriers whose qualified motor vehicles operate solely within Indiana, a specific Indiana Motor Carrier Fuel Tax (MCFT) license is required.
Calculating and Reporting the Tax
The process of calculating and reporting the tax is performed on a quarterly basis. The first step for a carrier is to determine the amount of fuel consumed within Indiana. This is found by dividing the total miles driven in Indiana by the vehicle’s average miles per gallon.
Next, the carrier calculates its net tax obligation. This involves taking the taxable gallons consumed in Indiana and subtracting any gallons of fuel on which Indiana tax was already paid at the pump. The resulting number is then multiplied by the applicable tax rate to determine the final amount due or the refund owed. For example, if a carrier used 1,000 gallons in Indiana and purchased 600 tax-paid gallons in the state, the tax would be calculated on the 400-gallon difference. For the period of July 1, 2025, through June 30, 2026, the MCFT rate is $0.36 per gallon for gasoline and $0.61 per gallon for special fuel and alternative fuels.
Interstate carriers file a consolidated IFTA quarterly return with their base state, which then distributes the taxes to Indiana and other member jurisdictions. Intrastate carriers file their quarterly fuel tax return directly with the Department of Revenue. The filing deadlines for these quarterly returns are:
- April 30 for the first quarter
- July 31 for the second quarter
- October 31 for the third quarter
- January 31 for the fourth quarter