IFTA Tax Rates in Kentucky (2026)

Key numbers at a glance

Kentucky sits at the junction of I-65, I-75, I-64 and I-71, hauling freight between Louisville, Lexington and the Cincinnati corridor, and its fuel tax structure is the most mechanically interesting of any state around it. The Kentucky Department of Revenue sets the motor fuels tax effective July 1 — gasoline at 25.0 cents, special fuels (diesel) at 22.0 cents and LPG at 25.0 cents per gallon for 2026-27 — and levies the gasoline tax on the average wholesale price per gallon as determined under KRS 138.228. A petroleum environmental assurance fee of 1.4 cents also applies at the distributor level.

But the number that surprises IFTA filers is the second line. Kentucky reports a supplementary highway user motor fuel tax — the use tax, built on the 9-percent-of-average-wholesale-price formula in KRS 138.220 — as a separate surcharge line on IFTA returns. On the Q3 2026 matrix that surcharge ran $0.045 per gallon on gasoline and $0.105 on diesel, stacking on the base rates. Add the pieces and Kentucky's combined IFTA rates are about 29.5 cents gasoline and 32.5 cents diesel — still the cheapest diesel of any neighbor. The full national picture is on the IFTA rates by state hub.

IFTA tax rates in Kentucky

Per the Kentucky Department of Revenue and the current IFTA matrix. Rates as of Q4 2026 — confirm the current official IFTA matrix before filing, because both the base rate and the use-tax line can move.

Two 2026 events shaped these numbers. First, the regular July 1 rate-setting reduced the listed per-gallon rates — gasoline to 25.0 cents and special fuels to 22.0 cents — under the average-wholesale-price mechanism. Second, an emergency order cut Kentucky fuel taxes by 10 cents per gallon from May 11 through June 9, 2026, which is why Q2 2026 returns show Kentucky lines at lower effective rates (the matrix carried 15 cents on gasoline during that window). The Tax Foundation pegged Kentucky's combined gasoline tax near 26.4 cents as of July 2026 on its excise-only accounting.

Fueling strategy: Kentucky versus its neighbors

Kentucky is ringed by more expensive diesel states. Rates below are from the current IFTA matrix (as of Q4 2026 — confirm the current official IFTA matrix; Virginia's figure includes its use-fee line).

Tennessee edges Kentucky on diesel by about 5.5 cents combined, so Nashville-bound loads might top off south of the line. Everywhere else, Kentucky wins: 30.5 cents a gallon below Indiana, 14.5 below Ohio, 41.3 below Illinois. A truck fueling 120 gallons in Louisville before an Indianapolis run prepays roughly $37 of tax at the Kentucky rate that Indiana miles would otherwise cost at 63 cents. The comparison that never changes: look at pump price minus tax — a high Kentucky sticker price still contains only 32.5 cents of recoverable diesel tax, while an Illinois pump hides 73.8. Check out-of-route cost against the saving with our deadhead miles guide, and model the route in the IFTA calculator.

How Kentucky IFTA affects your filings

Kentucky-based carriers file quarterly through the Kentucky Division of Motor Carriers; pass-through carriers carry Kentucky lines on their home-state returns — and that means two Kentucky lines, not one. The arithmetic: taxable gallons equal Kentucky miles divided by truck MPG. Drive 500 Kentucky miles at 6.5 MPG and you burn 76.9 gallons. The base tax is 76.9 times $0.22, or $16.92; the use-tax line adds 76.9 times $0.105, or $8.07; combined, 76.9 times $0.325 is $24.99 of Kentucky tax for that slice. Miss the surcharge line and your return understates Kentucky by roughly a third.

Calendar and records close it out. Returns are due April 30, July 31, October 31 and January 31, with late penalties typically $50 to $100 plus interest, and even zero-net quarters must be filed. Kentucky's average-wholesale-price machinery means both lines deserve a fresh look every quarter — pull the current matrix rather than reusing last quarter's PDF. Auditors ask for four consecutive quarters of receipts, per-jurisdiction distance records from your ELD or GPS, and your MPG math; mismatched receipts and miles remain the finding that starts most audits. Fleets that fuel heavily in Kentucky should expect refunds against the higher-rate states around it — that is the system working as designed.