Fleet Management

The Basics of the Heavy Vehicle Use Tax Return

July 2010, TruckingInfo.com - Feature

by Guest Commentary Heather Ness, J. J. Keller & Associates

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Do the numbers 2290 and the date of Aug. 31 ring a bell? If not, you had better keep reading.


2290 is referring to "Form 2290," the form used to file and pay the Internal Revenue Service heavy vehicle use tax (HVUT). Aug. 31 is the due date for this year's HVUT filings. Keeping up to date on the HVUT is extremely important. Before a heavy vehicle can be registered in any state, heavy vehicle owners must provide proof of HVUT payment.

The following information will help you understand the HVUT and how to file and pay the tax.

Who Pays the HVUT?

The HVUT is a federal tax that applies to highway motor vehicles having taxable gross weights of 55,000 pounds or more and includes trucks, tractors, and buses. Individuals, corporations, partnerships, and other types of organizations (including non-profit, charitable, educational, etc.) are subject to the tax. The tax applies to a taxable highway motor vehicle registered, or required to be registered, in any state or District of Columbia, Canadian, or Mexican law at the time of its first use during the reporting period.

The taxable gross weight of a vehicle, other than a bus, is the sum of the following:

* The actual unloaded weight of the vehicle fully equipped for service,
* The actual unloaded weight of any trailers or semitrailers fully equipped for service customarily used in combination with the vehicle, and
* The weight of the maximum load customarily carried on the vehicle and on any trailers or semitrailers customarily used in connection with the vehicle.

When determining the taxable gross weight, do not include vehicle weights used to obtain special temporary permits.

The Filing Process

The HVUT is filed using IRS Form 2290 and Schedule 1. The reporting period begins on July 1 and ends the following June 30. This year's tax reporting period is July 1, 2010, to June 30, 2011. The returns are due by the last day of the month following the month of the vehicle's first taxable use in the reporting period. For example, if the first taxable use of a vehicle is July 1, 2010, then Form 2290 and Schedule 1 must be filed and the tax must be paid by Aug. 31, 2010.

However, if a vehicle is placed into service at any time during the reporting period, an additional Form 2290 and Schedule 1 must be filed and any tax due must be paid. For example, a taxable vehicle was purchased on Jan. 5, 2011, the vehicle is required to be registered, and the vehicle is first used in January. Because the return is due by the last day of the month following the month of the vehicle's first taxable use, Form 2290 and Schedule 1 must be filed and the tax must be paid by Feb. 28, 2011.

A suspension of tax can be claimed if the vehicle is expected to operate 5,000 miles or less during the reporting period. In this case, file Form 2290 and Schedule 1 must still be filed but no tax payment is required.

Tax Calculations

The tax computation table is on page two of Form 2290. The amount of tax owed is calculated by taking the number of vehicles in a particular weight category and multiplying it by the applicable tax. For example, for two vehicles with a taxable gross weight of 55,000 pounds, the tax obligation would be two vehicles multiplied by the $100 tax per vehicle, for a total of $200 tax owed in that weight category.

If a vehicle is placed into service after July, only a partial-period tax is paid based on the number of months remaining in the reporting period. The applicable amounts can be found in the IRS publication, "Instructions for Form 2290."

Paying the Tax

Taxpayers with 25 vehicles or more must file the HVUT electronically; however, all taxpayers are encouraged to file electronically. Visit www.irs.gov/efile for more information. Appropriate addresses for those filing paper forms are listed in the IRS publication, "Instructions for Form 2290."

A full year's tax is paid on all vehicles in use during the month of July, or a partial-period tax if placed into service after July. The tax balance due shown on the form must be paid in full when filing Form 2290 and Schedule 1.

Proof of Tax Payment

Once the tax is paid, the IRS will issue the taxpayer a stamped copy of Schedule 1 as proof of tax payment. Electronic filers will receive a watermarked electronic copy of Schedule 1 from the IRS.

A handful of states will allow filers to submit the HVUT directly through the state department of motor vehicles. In this case, no further action is necessary to register vehicles.

Other states participate in the electronic sharing of the information taxpayers report when filing the HVUT. The states receive the vehicle information (such as the VIN) reported on the HVUT forms and verification that the tax was paid for the applicable vehicles. The IRS needs consent from the taxpayer to share the information, but in this manner, the state already has verification that the tax was paid. Check with the applicable registration state for more information.

HVUT Credits and Refunds

In some cases, a vehicle is sold after the HVUT has been paid. Or, the HVUT has been paid but the vehicle was used less than 5,000 miles during the reporting period.

Good news! In these cases, a credit can be claimed on the next form 2290 filing for the subsequent reporting period. Credits may be claimed but refunds in excess of the tax owed on the subsequent Form 2290 will not be issued. In other words, the credits cannot exceed the tax owed. If the credits exceed the tax owed, the excess must be claimed as a refund on a separate form, IRS Form 8849, Claim for Refund of Excise Taxes. Like the credits, refunds cannot be claimed until the subsequent reporting period.

For More Information

The IRS publication, "Instructions for Form 2290" shows who must file, where to file, exemptions from filing, how to pay the tax, recordkeeping requirements, determining the taxable gross weight, and other general information that will help with filing the HVUT. Contact information for the IRS is also provided for specific tax questions or issues.

Heather Ness is an associate editor at J. J. Keller & Associates, which provides risk and regulatory management solutions. The company employs over 1,000 associates and serves over 350,000 customers including more than 90 percent of the Fortune 1,000. J. J. Keller's products and services include publications, forms, training, software, consulting, online management tools, outsourced services, and mobile technology.



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