Owner Operators - The Grapevine
Federal Heavy Vehicle Tax
It's that time of the year again when Federal highway use tax on heavy motor vehicles that are operated on public highways must be paid to the Internal Revenue Service by the motor carrier or owner. The tax applies to highway motor vehicles having taxable gross weights of 55,000 pounds or more and includes trucks, tractors and buses. A highway motor vehicle includes any self-propelled vehicle designed to carry a load over public highways, whether or not it's also designed to perform other functions. A public highway is any road in the United States that is not a private roadway. This includes federal, state, county and city roads.
You must file Form 2290 and Schedule 1 for the July 1 period of the current year, through to June 30 of the next year if a taxable highway motor vehicle is registered, or required to be registered in your name under any state, District of Columbia, Canadian or Mexican law at the time of its first use during the period. You may be an individual, corporation, partnership or any other type of organization (including nonprofit charitable, educational, etc.). Schedule 1 is used to list all reportable vehicles by category and vehicle identification number (VIN).
Proof of payment of this tax is required in order to register your vehicle in any jurisdiction, both for the first time and renewal time. Proof of payment consists of a receipted Schedule 1 of Form 2290 (Heavy Highway Vehicle Use Tax Return) stamped and returned to the taxpayer by the IRS after the taxpayer has paid tax on the vehicle.
Form 2290 is used to figure and pay any tax on heavy vehicles, or to claim exemptions from the tax when such vehicles are expected to be used on public highways 5,000 miles or less (7,500 miles or less for agricultural vehicles) during the tax period. Additional returns must also be filed if the taxable gross weight of a vehicle increases during the tax period.
The tax period begins on July 1 and ends the following June 30, and you must pay the full year's tax on all vehicles that you have in use during the month of July. The tax can be paid in a single payment with your return or in four equal installments.
Returns must be filed by the last day of the month following the month of the vehicle's first taxable use in the tax period, even if you are filing the return just to suspend the tax for any vehicle. They must be filed in accordance with the instructions applicable to the form on which the return is made.
Returns of corporations, or person other than corporations, that are filed by hand carrying them in must be filed with the Commissioner in the Internal Revenue district where the principal place of business or principal office or agency of the corporation, or principal place of business or legal residence of the person is located.
Yes, Canadian and Mexican registered vehicles that operate in the United States must also pay the tax! The tax rate is, however, reduced by 25% for any vehicles registered in Canada or Mexico. The reduced tax applies whether or not the vehicles are also required to be registered in the United States.
Records must be kept for all taxable highway vehicles registered in your name and kept for at least three years after the date the tax is due or paid. You should also keep copies of all returns and schedules you have filed.
Full instructions attached to Form 2290 show who must file, where to file, exemptions from filing, how to pay the tax, record keeping requirements, determining the taxable gross weight and other general information. Forms are available at any local Internal Revenue Office or may be obtained from the IRS website.
Don't forget that this tax must be paid for any vehicle being licensed for over 55,000 pounds in a U. S. jurisdiction, even if the vehicle is exempt from paying the tax. States will not accept your license registration or renewal applications without a copy of the stamped Schedule 1 returned to you from the IRS.
| Q |
May drivers who work split shifts take advantage of the 100-air-mile radius exemption found at Sec. 395.1(e)? |
|
A |
Yes, drivers who work split shifts may take advantage of the 100-air-mile radius exemption if: 1) The drivers operate within a 100-air-mile radius of their normal work reporting locations; 2) The drivers return to their work-reporting locations and are released from work at the end of each shift and each shift is less than 12 consecutive hours; 3) The drivers are off-duty for more than eight consecutive hours before reporting for their shift of the day and spend less than 12 hours, in the aggregate, on-duty each day; 4) The drivers do not exceed a total of 10 hours driving time and are afforded eight or more consecutive hours off-duty prior to their first shift; and 5) The employing motor carriers maintain and retain the time records required by Sec. 395.1(e)(5). |
Newsletter Signup