What is the current tax rate for heavy highway vehicles?

Current Tax Rate for Heavy Highway Vehicles

If you are in the trucking business, then you must be abreast of the tax requirements for heavy highway vehicles lest you would fall into such non-compliance and consequent penalties. Amongst the heaviest taxes that the owners of heavyweight vehicles face in the United States is the Heavy Vehicle Use Tax (HVUT), which the IRS files Form 2290 on. This tax zeroes in on vehicles driven on public highways and have a gross weight that amounts to 55,000 pounds and more.

What is Heavy Highway Vehicle Use Tax?

The Heavy Vehicle Use Tax (HVUT) is an annual imposition imposed on heavy vehicles used on public highways. It is imposed to maintain the deterioration and damage brought about by such vehicles on highway infrastructures. Gross and annual mileage have been included in regard to the actual tax rate of a heavy highway vehicle.

Tax Rates for Heavy Highway Vehicles

Specifically, HVUT taxes are determined based on the class weight of a vehicle. The rates for the current tax year range between $100 and $550 per vehicle. Applicable Rates are as shown below:

• Vehicles weighing between 55,000 to 75,000 pounds: The tax starts at $100 if the gross weight of the vehicle is above 55,000 pounds but is below 75,000 pounds. For every additional 1,000 pounds above the 55,000-pound mark, add $22. For example, a 60,000-pound vehicle would have a tax of $210. check IRS records too when filling up your Employer Identification Number.
• Vehicles Weighing Over 75,000 Pounds: For every vehicle that weighs more than 75,000 pounds, the tax is so capped at $550 per year. This rate is universal; one doesn't pay more with regard to the amount of weight over 75,000 pounds.

Exceptions and Special Cases

The HVUT applies for most heavy vehicles; however, there are exceptions. For example:

• Mileage Exemption: All the vehicle entities which cover less than 5,000 miles in a year (7,500 miles for agricultural vehicles) are exempted to pay HVUT. This does not mean that vehicles which cover less than 5,000 miles per year are always exempted to file 2290. They have to file 2290 to report their status and claim their exemption. check IRS records too when filling up your Employer Identification Number.
• Government and Non-Profit Vehicles: Vehicles are exempt from this tax, usually being owned and operated by government organizations or some kind of a non-profit entities. Proof of the exempt status is to be submitted along with Form 2290. check IRS records too when filling up your Employer Identification Number.
• Electric Trucks: Electric heavy trucks have also featured in discussions about what tax obligations they would face. As of now, electric heavy vehicles remain taxable under HVUT if their gross weight exceeds the threshold.

How and When to File Form 2290

Form 2290 needs to be filed by August of every year for all heavy vehicles put into operation on highways. The tax period ranges from July 1 of a particular year to June 30 of the subsequent calendar year. Filing and payment can be made up to August 31 of the same calendar year, and no penalties are given. When a vehicle is put into service after the beginning of the tax period, then the owner of that vehicle must submit Form 2290 by the end of the month following that month in which it was first used.

The IRS has an e-filing system, which is the most efficient method to use when filing Form 2290. But it's also required for anyone who reports on 25 or more vehicles. This really streamlines the tax compliance process for fleet owners so they get their Schedule 1-proof of payment as fast as possible.

Why Compliance Matters

Failure to comply with the HVUT attracts heavy penalties, which are added to the cost burden for truck owners. The final requirement, proof of payment of HVUT, is also mandatory for state vehicle registration and without this proof, owners will not be able to register or renew their license plates to continue in operation within the legal order of things.

The Heavy Highway Vehicle Use Tax (HVUT) is actually one of the most significant taxes in ensuring that roads and highways in the country will remain the best. This tax lets owners of vehicles weighing 55,001 pounds and more know what rates apply at present and the requirements for filing taxes. The tax rate lies between $100 and $550 annually while taking into account some exceptions which were given to low mileage, non-profit, and government vehicles. Moreover, compliance will ensure the continuity of a smooth registration of vehicles, which supports the maintenance of essential infrastructure.

HVUT obligations and filing requirements can be met before deadlines without penalties for the legal registration of trucks with no service interruption to business operations by truck owners.

Note: For more information, visit IRS website