Fuel Tax Refunds for Large Motor Carriers: Your Money Back Playbook
If you’re running a large motor carrier fleet under IRP and IFTA, you’re likely leaving money on the table. Fuel tax refunds exist for several types of non-propulsion fuel use, and with the right systems in place, you can recover hundreds to thousands of dollars per power unit annually. Here’s what you need to know.
Motor carriers operating qualified equipment can claim federal and state fuel tax refunds for diesel used in ways other than propelling vehicles down the highway. The big four categories are auxiliary power units (APUs), refrigeration units (reefers), power take-off equipment (PTO), and off-highway use. Combined federal and state refunds typically range from $250 to $2,400+ per power unit annually, depending on equipment type and usage. The catch? You need detailed fuel tracking and proper documentation, but the payback makes it worthwhile for fleets of any size.
Types of Refunds to Apply For
APU (Auxiliary Power Unit) Refunds
APUs are the small diesel engines mounted on sleeper cabs that provide climate control and electrical power without idling the main engine. Since this fuel doesn’t propel the vehicle on the highway, it qualifies for federal excise tax refunds at 24.3 cents per gallon for diesel. Many states, including Texas (as of September 2025), also allow state fuel tax credits or refunds for APU fuel consumption.
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Reefer (Refrigeration) Unit Refunds
If you haul refrigerated trailers, the diesel consumed by the reefer unit qualifies for both federal and state refunds. This is one of the highest-value refund opportunities since reefers run continuously during transport, burning significant fuel that never touches the highway.
PTO (Power Take-Off) Equipment Refunds
PTO systems divert engine power to operate hydraulic pumps, mixers, compressors, and other auxiliary equipment. Common applications include concrete mixers, dump truck beds, vacuum trucks, waste haulers, and utility bucket trucks. Federal regulations allow refunds for fuel consumed by PTO equipment, and several states now offer credits as well.
Off-Highway Use Refunds
Fuel used entirely off public highways—such as on construction sites, private property, or closed roads—qualifies for exemption from highway fuel taxes. This applies to vehicles operating on job sites, private roads, or other non-highway locations.
Leave no stone unturned.
Questions to ask yourself:
- Do your trucks have diesel-fired auxiliary power units installed?
- Can you track APU fuel consumption separately from main engine fuel?
- Do your APUs have telematics or hour meters to document runtime?
- Do you operate refrigerated trailers with diesel-powered refrigeration units?
- Do you pump reefer fuel on separate receipts from your main fuel purchases?
- Can you document gallons consumed by the reefer unit versus the tractor?
- Does your equipment use PTO systems like hydraulic pumps, cement mixers, or compressors?
- Can you measure or estimate the percentage of fuel consumed by PTO operations?
- Do you operate concrete trucks, waste haulers, dump trucks, or utility vehicles with bucket lifts?
- Do your vehicles operate on private property, construction sites, or closed roads?
- Can you document miles driven off-highway versus on-highway?
- Is your equipment designated as off-highway transportation equipment?
If the answer is yes to a few or all of these questions – it’s worth further investigation.
Expected Savings
Based on typical usage patterns and current federal and state tax rates, here’s what you can expect to recover annually:
APU Refunds: $250–$400 per truck
A typical APU burns 0.2 to 0.3 gallons per hour. With 2,000 hours of annual operation (common for long-haul trucks), that’s roughly 500 gallons per year. At federal rates (24.3¢/gallon) plus average state taxes (~30¢/gallon), you’re looking at $250–$300 per truck annually, with potential for higher recovery in high-tax states.
Reefer Refunds: $1,200–$2,400+ per truck
Reefer units consume 0.5 to 1.5 gallons per hour depending on load and temperature. Running 20 hours daily for 300 transport days means 4,000–6,000 gallons annually. Federal and state refunds combined can yield $2,000–$3,000+ per reefer truck—making this the highest-value recovery opportunity.
PTO Equipment Refunds: $250–$1,500 per truck
PTO fuel consumption varies widely by equipment type. States like Texas and California allow 10% for general equipment, 15% for dumps and wreckers, and 30% for concrete mixers and waste trucks. For a truck consuming 10,000 gallons annually, PTO refunds range from $500 (10% usage) to $1,500 (30% usage) combining federal and state taxes.
Off-Highway Use Refunds: $500–$1,000+ per vehicle
If 20% of your operations occur off public roads, and your vehicle consumes 10,000 gallons annually, you can recover taxes on 2,000 gallons—yielding roughly $1,000 per vehicle in combined federal and state refunds.
Conclusion
These refund programs exist because highway fuel taxes fund road maintenance—and non-propulsion uses don’t wear down highways. The recovery process requires solid recordkeeping: fuel receipts, hour meters, mileage logs, and equipment documentation. Many fleets use fuel cards with detailed reporting to automatically separate qualifying gallons. For IFTA carriers, you’ll file federal refunds using IRS Form 4136 with your annual tax return, while state refunds are claimed through your base jurisdiction using forms like Texas Form 06-106.
If you’re not tracking and claiming these refunds, you’re essentially overpaying your fuel taxes. For a 100-truck fleet with mixed equipment, annual recoveries can easily reach six figures—money that belongs back in your operation, not sitting with the government.
