Heavy Vehicle Use Tax (HVUT): What You Need To Know
If you're a Canadian transportation carrier operating in the US, then your heavy vehicles are subject to the heavy vehicle use tax (HVUT). This HVUT tax year starts July 1, 2014 and runs until June 30, 2015. Below is some important information about the HVUT:
Vehicles subject to the HVUT: If your vehicle has a taxable weight of 55,000 pounds or more (including trucks, tractors, and buses), you’re subject to the tax. The taxable weight is the empty gross weight of the vehicle, plus the empty weights of any attached trailers, plus the heaviest weight of the loads the vehicle and/or trailers will carry.
How “2290” is related to the HVUT: “2290” is the IRS form number used to file the HVUT. The HVUT is filed using IRS Form 2290 and Schedule 1.
Who must file and pay the HVUT: You’re required to file the form and schedule if a taxable highway motor vehicle is registered, or required to be registered, in your name under any state or District of Columbia, Canadian, or Mexican law at the time of its first use during the reporting period.
How the HVUT is calculated: The HVUT is based on the taxable weights of the vehicles and the number of vehicles in the taxable weight category. The tax for a vehicle at 55,000 pounds is $100 USD. The tax increases by $22 USD per 1,000 pounds over 55,000 pounds. A taxable vehicle that is at 80,000 pounds taxable weight is $550 USD. For example, for five vehicles with a taxable gross weight of 80,000 pounds ($550 USD each), the total tax would be $2,750 USD.
When the HVUT filing is due: This year’s 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 your vehicles is on July 1, 2014, then you need to file Form 2290 and Schedule 1 and pay any tax due by August 31, 2014.
Adding a vehicle to a fleet partway through the year: If any vehicle is placed into service at any time during the reporting period and is operated in the US, you must file an additional Form 2290 and Schedule 1 and pay tax due, if applicable. For example, you purchase a taxable vehicle on December 5, 2014, and the vehicle is required to be registered in your name and the vehicle is first used in December. In this case, you must file an additional Form 2290 and Schedule 1 and pay the tax due before January 31, 2015. Since it’s a partial year filing, you pay a reduced amount based on the number of months remaining in the year.
What to do if the taxable weight on a vehicle increases: If a vehicle's gross weight increases, you will need to file an amended return and pay additional tax due on the increased weight.
How to claim a suspension of tax: If your vehicle will operate 5,000 miles or less during the tax year, you will still have to file Form 2290 and Schedule 1, but no tax payment is required because you’ve claimed a suspension. If, however, you end up operating the vehicle more than 5,000 miles during the tax year, you must then file an amendment to your original filing and pay the tax due.
When electronic filing of HVUT is required: If you have 25 or more vehicles, you are required to file the HVUT electronically. However, the IRS encourages all taxpayers to file electronically. There are benefits even if you have fewer than 25 vehicles. You can print your proof of tax payment within minutes after the IRS accepts your return and you do not need to wait for paper copies to arrive in the mail.
Enforcement of the HVUT: If you’re based in Canada and are operating taxable vehicles into the United States, then you do need to carry proof of HVUT filing. You may be asked to provide proof of filing to a U.S. Customs and Border Protection officer.
For more information on the HVUT, please visit Instructions for Form 2290 published by the Internal Revenue Service.
Source: HVUT Frequently Asked Questions by J.J. Keller & Associates, Inc (July 2, 2014).
Tia Chisholm, HUB International TRANSPORTATION
HUB International TRANSPORTATION specialists are based in Vancouver. Our longstanding relationships with the best providers in the business allow us to deliver the solution that serve you best. With HUB, you can run your business knowing that you are headed in the right direction.