Trying to understand indiana fuel tax rate need help?

Yup. KY & VA do the same too.

 

The $.11 is a surtax that is not refundable. It is calculated the same way as the state fuel taxes. It is possible to buy enough fuel to cancel out any fuel taxes that you may owe, on $.16 a gallon, but the $.11 is not refundable like the $.16 is. When calculating your taxes use $.27

 

If you only buy fuel in In. how will you not owe any fuel tax?

 

You can't cancel it out if you only buy in Indiana. The way to cancel it out would to buy only in high tax states like ILL.
If you buy and drive only in Indiana, you would owe the .11 cents per gallon on all the fuel you buy. Indiana does this to show the price on the pump as low and it makes up for the sales tax they don't charge big rigs but do charge pickups. Also they do this as to not have to give refunds.

Think of it as your only paying half the tax due at the pump. Indiana was the first to do this and the highest. Ky also does this but I think theirs is only 3 cents surcharge.

 

Indiana charges $0.16 a gallons to everyone purchasing diesel unless it is exempt. If you drive a subject vehicle (26,000 lbs. +) there is an additional $0.11 surcharge. Subject vehicles pay more than non. For any fuel purchased in Indiana there is a $0.16 credit given but the tax due is calculated using $0.27. For the most part, buying fuel in Indiana will result in under payment of taxes and amounts due on the return.

 

When pricing if it is good to buy fuel in IN just use the $0.16 as the tax rate. Forget the $0.11 surcharge as it is not part of IFTA, much like the OR mileage tax. Once or twice I have found the fuel price to be favorable in IN after you deduct the fuel tax but 9/10 it's been better to buy fuel elsewhere like IL.

 

The $0.11 surcharge is MOST DEFINATELY part of IFTA. The surcharge is assessed at the time the quarterly return is completed on all gallons of fuel consumed in Indiana. It cannot be paid at the pump.

 

Your missing the point....when you buy fuel in IN you just minus the .16 to get your after tax price. Some people add .16 and .11 together and then deduct that from the pump price. This is incorrect. Although the .11 is paid with the quarterly IFTA return it is not part of the IFTA fund pool, as 100% of the .11 goes to IN. So since it can't be credited towards your IFTA pool to be distributed amongst other states and is a surcharge much like the OR mileage tax, it is not part of IFTA.

 

I didn't miss the point. I understood what you were trying to say but did not agree with how you said it. The $0.11 surcharge has nothing to do with determing fuel costs at the pump for comparison purposes. That does not remove it from being a part of IFTA. If fuel is overpurchased in IL, the overpaid tax money could cover the IN surcharge. If taxpayers ignore the surcharge as part of IFTA then they may be surprised by the possible assessment on return because fuel was purchased in Indiana. That information could be important to someone trying to spread the IFTA costs over the quarter. If the only consideration is price at the pump then the surcharge should be ignored.