International Fuel Tax Agreement (IFTA)

International Fuel Tax Agreement (IFTA)

South Dakota is a member of the International Fuel Tax Agreement (IFTA). Motor carriers must either have an IFTA license or purchase a temporary single-trip permit to operate an IFTA-qualified vehicle in South Dakota.

International Fuel Tax Agreement

IFTA is an agreement among member jurisdictions to simplify the reporting of fuel taxes by interstate motor carriers. A carrier opens a fuel tax account for all IFTA members with its base jurisdiction. The carrier registers its fleet as a unit, not as individual vehicles. If a carrier chooses, it may divide its vehicles into more than one fleet and base these fleets in appropriate IFTA jurisdictions.

IFTA covers operation of IFTA-qualified interstate commercial vehicles and combinations, which include vehicles:

  • with two axles and a gross weight or registered gross vehicle weight exceeding 26,000 pounds;
  • with three or more axles regardless of weight; and
  • used in combination when the weight of the combination exceeds 26,000 pounds.

IFTA Licensing in South Dakota

Carriers may license their vehicles through South Dakota if they:

  • are a South Dakota-based interstate motor carrier;
  • keep operational control and records for their vehicles or can make their records available in South Dakota; and
  • operate IFTA-qualified motor vehicles other than recreational vehicles.

When a carrier’s application with IFTA has been approved, the base jurisdiction assigns the fleet an account number and issues the carrier an IFTA license. A copy of the license must be carried in the cab of each vehicle in the fleet and serves as the IFTA cab card. The base jurisdiction also issues an external fuel decal, which is reissued annually. A photocopy of a valid tax license is acceptable in South Dakota.

For more details about an IFTA license or to obtain a license application, please contact the Motor Fuel Section of the Motor Vehicle Division at (605)773-3314, https://dor.sd.gov/motor_vehicles/, or an MVD office.

Dyed Motor Fuel

Fuel intended for non-highway use, including that for farm and mining equipment, is dyed red to indicate that it is exempt from state and federal taxes. Except in special mobile equipment, it is illegal to use dyed fuel on the highway to avoid paying these taxes.

The South Dakota Highway Patrol may stop and inspect vehicles that are using or transporting dyed fuel to determine whether all taxes have been paid. The penalty for using dyed (untaxed) diesel fuel in a licensed vehicle is $500 for IFTA-qualified vehicles and $250 for unqualified vehicles. The Internal Revenue Service may also assess a federal penalty.

For more details about South Dakota’s dyed fuel laws and fines, contact the Motor Fuel Section of the Motor Vehicle Division at (605) 773-3314, the MVD website https://dor.sd.gov/motor_vehicles/, or an MVD office.