What is the Heavy Vehicle Use Tax (HVUT)?
All commercial vehicles exceeding a certain weight are subject to the Heavy Vehicle Use Tax. Let’s review the basics and see if they apply to you and your business.
Understanding the Heavy Vehicle Use Tax
If you operate a heavy commercial vehicle on public roads, this tax almost certainly applies to you.
The Heavy Vehicle Use Tax (HVUT) is a federal tax on vehicles operating on public highways with a gross weight of 55,000 pounds or higher. The tax helps fund highway construction, maintenance, and repairs. Since heavy vehicles take a bigger toll on public roads, the tax is necessary to keep everything in good condition.
Payments are made annually and based on the vehicle’s weight and use. For vehicles with a gross weight of 55,000 pounds or more, there is a $100 tax. $22 is added for every 1,000 pounds above this weight—vehicles with a gross weight of 75,000 pounds or more max out at an extra $550. You will not be taxed more than this.
The HVUT is paid by filing Form 2290 with the IRS.
Due Dates and Penalties For the Tax
The HVUT is due annually on the last day of the month after the month that it was first used.
Let’s put this in simpler terms.
If you first use your heavy vehicle on public highways on June 1st, 2024, the tax will be due July 31st, 2025. Although your tax would be due July 31st, your tax period would be June 1st, 2024 through May 31st, 2025.
Failure to pay by the due date will result in penalties and interest. This includes an extra fee of 4.5% of the taxes due every month if not paid. However, penalties max out 25% (5 months) of the total amount due.
Filing Your Heavy Vehicle Use Tax
First, gather all the necessary information. This will include your EIN, VIN, and vehicle’s gross weight. You can either file your HVUT electronically or by mail. Electronically is typically the better option. It’s faster, and you will get confirmation of a receipt right away.
Be sure to complete your 2290 Form. This will provide information about your vehicle and business and confirm your payment method to the IRS.
Pay your HVUT either electronically or by check/money order. If you choose to send your payment by mail, send it with your 2290. This can also be done electronically or by mail. If you choose to go the electronic route, submit the form through an authorized IRS e-file provider. This is easily found on the IRS’s website. If submitted by mail, send the form with the payment to the address you have on your form.
When all this is done, keep a copy of your HVUT receipt! The IRS will send you a stamped copy of your schedule 1. This confirms that you have paid. Be sure to keep this in your records. You can use it to provide proof of payment during a road stop. You also may need it when renewing your vehicle’s registration.
Each state also has its separate highway taxes. These are in addition to the HVUT.
How is the Amount of Taxes Owed Determined?
The amount of tax owed is determined by the vehicle’s gross weight, which is the total weight of the vehicle, including the maximum load it can carry. The HVUT tax rates vary based on the gross weight of the vehicle, with higher rates for heavier vehicles.
For example, for the 2021-2022 tax year, the HVUT rates are:
- $100 plus $22 per 1,000 pounds over 55,000 pounds for vehicles with a gross weight of 55,000 to 75,000 pounds.
- $550 plus $22 per 1,000 pounds over 75,000 pounds for vehicles with a gross weight of 75,001 to 100,000 pounds.
- $1,725 plus $22 per 1,000 pounds over 100,000 pounds for vehicles with a gross weight of 100,001 pounds or more.
Exemptions
Certain exemptions to the Heavy Vehicle Use Tax apply to specific types of commercial vehicles. Agricultural vehicles, for example, are exempt from the HVUT if they travel fewer than 7,500 miles on public highways during the tax period. Government-owned vehicles used for official purposes are also exempt from the tax. Additionally, certain types of trailers are exempt from the HVUT, including trailers used exclusively to transport chassis, containers, or other cargo-carrying equipment.
Another exemption to the HVUT is for vehicles that are not used for business purposes. For instance, recreational vehicles, motorhomes, and other personal use vehicles are not subject to the HVUT tax, regardless of their weight. However, suppose a commercial vehicle is used for both business and personal purposes. In that case, the owner may be required to pay a prorated amount of the tax based on the percentage of the vehicle’s use for business purposes.
Commercial vehicle owners need to understand the HVUT exemptions to avoid unnecessary tax payments. However, it’s crucial to note that even if a vehicle is exempt from the HVUT, it may still be subject to other federal, state, or local taxes and fees. Therefore, it’s always best to consult with a tax professional or the Internal Revenue Service (IRS) to determine a vehicle’s specific tax obligations.
What Happens if I Fail to Pay the HVUT?
Commercial vehicle owners who fail to pay the Heavy Vehicle Use Tax or file the tax return by the August 31st deadline may face penalties and interest charges. The penalty for late payment is 4.5% of the tax due, plus an additional 0.5% per month of the unpaid tax. If the tax return is not filed at all, the penalty increases to 5% of the unpaid tax per month, up to a maximum of 25% of the total tax due.
Failing to pay the HVUT may result in the suspension of the vehicle’s registration. This means that the vehicle cannot legally operate on public highways until the tax is paid, and the registration is reinstated. The IRS may also take legal action, such as seizing the vehicle or placing a lien on the owner’s assets, to collect the unpaid tax. Therefore, commercial vehicle owners must comply with the HVUT requirements to avoid penalties, registration suspension, and legal consequences.
Rely on FCCR to file your HVUT, streamlining the process and helping you avoid costly compliance issues.
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