Tag Archives: Heavy Highway Vehicle Use Tax

The Heavy Highway Vehicle Use Tax – Upcoming Deadline August 31, 2022 | Legal Thoughts

Coleman Jackson, P.C. | Transcript of Legal Thoughts
Published August 15, 2022

The Heavy Highway Vehicle Use Tax - Upcoming Deadline August 31, 2022

Legal Thoughts is an audiocast presentation by Coleman Jackson, P.C., a law firm based in Dallas, Texas serving individuals, businesses, and agencies from around the world in taxation, litigation, and immigration legal matters.

This episode of Legal Thoughts is an audiocast where the Attorney, Coleman Jackson is being interviewed by Alexis Brewer, Tax Legal Assistant of Coleman Jackson, P.C. The topic of discussion is: The Heavy Highway Vehicle Use Tax — Upcoming Deadline August 31, 2022. You can listen to this podcast by clicking here:

If you enjoy this podcast, make sure to stay tuned for more episodes from the taxation, litigation, and immigration Law Firm of Coleman Jackson, P.C. Be sure to subscribe. Visit the taxation, litigation and immigration law firm of Coleman Jackson, P.C. online at www.cjacksonlaw.com.

TRANSCRIPT:

ATTORNEY: Coleman Jackson

LEGAL THOUGHTS

COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW

ATTORNEY: Coleman Jackson

Welcome to Legal Thoughts

My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, litigation and immigration law firm based in Dallas, Texas.

In addition to myself, we have Alexis Brewer – Tax Legal Assistant, Leiliane Godeiro – Litigation Legal Assistant, Gladys Marcos – Immigration Legal Assistant, and Johanna Powell – Tax Legal Assistant.

On today’s “Legal Thoughts” podcast, our Tax Legal Assistant, Alexis Brewer, will be interviewing me on the important topic of: The Heavy Highway Vehicle Use Tax — Upcoming Deadline August 31, 2022.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Hi everyone, my name is Alexis Brewer and I am a Tax Legal Assistant at the tax, litigation and immigration law firm of Coleman Jackson, Professional Corporation. Our law firm is located at 6060 North Central Expressway, Suite 620, right here in Dallas, Texas.

Good afternoon, Attorney; thank you for agreeing to sit with me as I interview you with respect to this hot tax topic: The Heavy Highway Vehicle Use Tax and its upcoming deadline of August 31, 2022.

Let’s get started.

Question 1: Attorney, who in America is required to the pay heavy highway use tax?  How does a driver determine whether they must pay this heavy highway use tax? I mean, many of us commute from home to our places of work on a daily basis!

Attorney Answer – Question 1:

Good afternoon, Alexis.

First of all, let me address your concerns regarding the average commuter: the Heavy Highway Use Tax does not apply to the average commuter.

Now that I have removed that fear, let me address your question in earnest.

Alexis, the Heavy Highway Use Tax applies to those highway drivers who drive America’s highways with any self-propelled vehicle designed to carry a load regardless of whether or not their motor vehicle is also designed to perform other functions. The key focus addressed by Congress is not on heavy highway use, generally, but rather focus is on the wear and tear on our interstate highway system by motor vehicles like tractor trailer trucks and the like pulling and carrying bulk cargo over the highways.

The focus is on highway use by heavy vehicles, such as, massive trucks, truck tractors, and commercial buses. Generally, vans, pickup trucks, panel trucks, box trucks and similar vehicles are not subject to the heavy highway use tax because they have a taxable gross weight of less than 55,000 pounds.

The answer to the second part of your question, Alexis, as to what drivers need to know in making a determination as to whether the heavy highway use tax applies to them is as follows:

  1. What is the taxable gross weight of your vehicle? Is it 55,000 pounds or not?
  2. What is the month the vehicle was first used during the tax period? A tax period starts on July 1 of one year and ends on June 30 of the following year.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

That leads me right into my next question –

Question 2: What does the term taxable gross weight mean?

Attorney Answer – Question 2:

That’s a great question, Alexis.
The Internal Revenue Code addresses two concepts when defining the term taxable gross weight:
First Concept:  Actual unloaded weight is the empty weight of the truck, truck-tractor, or bus, fully equipped for service.
What does it mean that a vehicle is “fully equipped for service”?

  1. With respect to trucks and truck-tractors, fully equipped for service includes the body of the vehicle, accessories, equipment attached to or carried on such truck or truck-tractor for use in connection with the movement of the vehicle by means of its own motor or for use in the maintenance of the vehicle; and a full complement of lubricants, fuel, and water. Fully equipped for service does not include the driver, any equipment (not including the body) attached to or carried on the vehicle for use in handling, protecting, or preserving cargo, or any special equipment (such as an air compressor, crane, specialized oilfield machinery, etc.) mounted on the vehicle for use on construction jobs, in oilfield operations, etc.
  2. With respect to buses, fully equipped for service includes body, accessories, equipment attached to or carried on such bus for use in connection with the movement of the vehicle by means of its own motor, for use in the maintenance of the vehicle, or for the accommodation of passengers or others, and a full complement of lubricants, fuel, and water. It does not include the bus driver.

Second Concept: The taxable gross weight of a highway motor vehicle is determined by using the following mathematical formula:
1. the sum of the actual unloaded weight of the vehicle fully equipped for service, plus
2. the actual unloaded weight of any semitrailers or trailers fully equipped for service customarily used in combination with the vehicle, plus
3. the weight of the maximum load customarily carried on the vehicle and on any semitrailers or trailers customarily used in combination with the vehicle.
In summary, the taxable gross weight of a vehicle is the sum of: the actual unloaded weight of the vehicle that is fully equipped for service, the actual unloaded weight of trailers or semi-trailers fully equipped for service typically used in combination with the vehicle, and the weight of maximum load typically carried on the vehicle and on trailers or semi-trailers.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Question 3: What are the weight categories and the tax rate that the owners must pay?

Attorney Answer – Question 3:

The weight is very straightforward. Vehicles that weigh 55,000 tons and above must pay the heavy highway use tax.

The heavy highway use tax rate is between $100 and $550 using the mathematical formula that I just finished explaining.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Well, are there any exemptions to the heavy highway use tax?

Attorney Answer – Question 4:

Yes, in fact there are several exemptions to the Heavy Highway Use Tax. Exemptions from this excise tax require that a highway motor vehicle be used and actually operated by:

  • The Federal Government,
  • The District of Columbia
  • A state or local government,
  • The American National Red Cross,
  • A nonprofit volunteer fire department, ambulance association, or rescue squad,
  • An Indian tribal government but only if the vehicle’s use involves the exercise of an essential tribal government function, or
  • A mass transportation authority if it is created under a statute that gives it certain powers normally exercised by the state.

Also exempt from the tax (not required to file Form 2290) are:

  • Qualified blood collector vehicles (see below) used by qualified blood collector organizations, and
  • Mobile machinery that meets the specifications for a chassis as described under Specially designed mobile machinery for non-transportation functions.

INTERVIEWER: Alexis Brewer, Tax Legal Assistant

Alright, Attorney, I have a cluster of final questions:

  1. When is the deadline for filing Form 2290, the Heavy Highway Use Tax Return?
  2. What happens if the Heavy Highway Use Tax return is not timely filed??

Attorney Answer – Question 5:

Section 41.6011(a)1 of the Income Tax Regulations requires each person that is liable for the tax imposed by Internal Revenue Code Section 4481 to file for each taxable period. The taxable period begins July 1 and extends through June 30 the following year. Form 2290, the Heavy Highway Use Tax Return is due by August 31st of each year. For drivers of first use vehicles after July 1st, the filing deadline is the last day of the month following the month of first use.

Let me point out that the return due date and the payment due date is the same; August 31st. The deadline for this year, is Wednesday, August 31, 2022. Once completed, Form 2290, the Heavy Highway Use Tax Return is filed with the Internal Revenue Service.

Possible tax penalties for failure to file a required Form 2290, Heavy Highway Use Tax Return, include failure to file penalties or accuracy penalties in the event the computations are wrong.  These are 20% penalties that are imposed by the IRS in addition to the taxes originally due. Heavy highway truck drivers are likely to receive notices of noncompliance from the IRS.

Let me just add this warning: sometimes oversight of these excise tax areas, like The Heavy Highway Use Tax, result in audit examinations of taxpayers entire Form 1120 (corporate tax returns), 1065 (partnership returns), and 1040 (individual) tax returns of parties who fail to comply with Internal Revenue Code Section 4481 and the related Internal Revenue Regulations.

Interviewer Wrap-Up

Attorney, thank you for siting with me today to explain this information about the Heavy Highway Vehicle Use Tax and its upcoming deadline of August 31, 2022.

The takeaway seems to be that it’s better to file these excise taxes (like the Heavy Highway Vehicle Use Tax) on time to avoid penalties that later could bring bad consequences for the taxpayer’s household and business.

To our listeners who want to hear more podcast like this one please subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or where ever you listen to your podcast. Take care, everyone! And come back in about two weeks, for more taxation, litigation and immigration Legal Thoughts from Coleman Jackson, P.C., located right here in Dallas, Texas at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206.

English callers:  214-599-0431 | Spanish callers:  214-599-0432 |Portuguese callers: 214-272-3100

Attorney Closing Remarks

This is the end of today’s Legal Thoughts!

Thank you all for giving us the opportunity to inform you about: the Heavy Highway Vehicle Use Tax and its upcoming deadline of August 31, 2022.

If you want to see or hear more taxation, litigation and immigration LEGAL THOUGHTS from Coleman Jackson, P.C.  Subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever you listen to your podcast.

Stay tuned!  We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration.  Until next time, take care.