Indiana Diesel Buyers May be Eligible for a Tax Refund

Changes to Indiana law that were designed to sustain the state’s road funding went into effect July 1, 2017. Part of this law relates to the International Fuel Tax Association (IFTA) tax. The law places a 21-cent-per-gallon Motor Carrier Surcharge Tax that is included in the price at Indiana pumps, but only for “special fuels” (which include diesel, biodiesel, CNG, and LNG).

Because the tax is included in the price at the pump, or when delivered, every gallon of clear diesel fuel placed into a vehicle has paid tax - whether or not that vehicle should be subject to the tax. Therefore, a refund opportunity may be available. To start, determine if your vehicle is subject to the tax.

The following vehicles are subject to the tax:

  1. road tractor;
  2. tractor truck;
  3. truck having more than two axles; (Generally see exempt #6 below)
  4. truck having a gross weight or a declared gross weight greater than 26,000 pounds; and
  5. vehicle used in combination if the gross weight or the declared gross weight of the combination is greater than 26,000 pounds; that is propelled by motor fuel

The following vehicles are exempt from this tax:

  1. A vehicle operated by:
    a. the State of Indiana
    b. a political subdivision (as defined in IC 36-1-2-13);
    c. the United States; or
    d. an agency of states and the United States, or of two or more states, in which this state participates.
  2. Trucks, trailers, or semitrailers and tractors that are registered as farm trucks, farm trailers, or farm semitrailers and tractors under IC 9-18 (before its expiration), IC 9-18.1-7, or a similar law of another state.
  3. A bus used in casual or charter bus operations (as defined in IC 9-13-2-17).
  4. A vehicle described in subsection (a)(1) through (a)(3) when the vehicle is displaying a dealer registration plate.
  5. A recreational vehicle.
  6. A pickup truck that:
    a. is modified to include a third free rotating axle;
    b. has a gross weight not greater than 26,000 pounds; and
    c. is operated solely for personal use and not for commercial use.

For example, if you are using a diesel truck plated less than 26,000 pounds or a diesel powered vehicle that meets the exempt definitions above, you will want to file an IFTA Surcharge refund claim using form GA110L. You must have proof of purchase and can file anytime although they have requested that surcharge refund claims be limited to once per quarter. In addition, “ALL documentary evidence” is required. One of our clients is using vehicle log books to calculate the miles driven and backing into gallons consumed based on miles per gallon (MPG). So far the Indiana Department of Revenue has been accepting this form of evidence.

Here’s an example of how the refund can help:

If you have any questions or need help determining if your vehicle is exempt, please comment below or contact us directly.


Jim Champer, CPA
Senior Manager | 574.289.4011 x231

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