A new U.S. Heavy Vehicle Use Tax (HVUT) tax year began on July 1, and there are several things carriers need to know about the tax to keep an operation in good standing.
The HVUT applies to vehicles that operate on a U.S. public highway and have a taxable gross weight of 55,000 pounds or more. A related filing is due at the end of the month that follows the month in which a vehicle is first used during the tax year.
Put another way, carriers that operate a taxable vehicle in July would traditionally need to file and pay the HVUT by Aug. 31. But with that date falling on a Saturday, and the following weekend being a legal holiday, the July filings are actually due on Sept. 3 in 2019.
Taxable vehicles that begin running in the U.S. after July will have their taxes prorated for the remaining months. Their filings and any related payments will also be due at the end of the month that follows the month in which a vehicle is first used during the tax year.
How HVUT is enforced
When working with U.S. carriers, state vehicle licensing offices track and enforce the HVUT. Proof of the tax payments have to be provided before vehicle registration credentials are issued.
Canada-based carriers face a different approach because the U.S. Internal Revenue Service (IRS) doesn’t expect provincial licensing offices to enforce a U.S. tax. When entering the U.S., these carriers have to provide proof of a tax payment or filing, or a written declaration in place of that proof.
Carriers that are U.S. “regulars” could choose to file and pay right away. However, the carriers based in Canada are allowed to observe the same filing timeframes as their U.S. counterparts – with filings and payments due at the end of the month following the vehicle’s first miles on a public roadway during the tax year.
This means that those subject to the HVUT in July will have until Sept. 3 to file and pay the tax. If the carrier operates in the U.S. before the HVUT is filed, a driver can carry a written declaration up until the Sept. 3 deadline.
Any written declaration must include:
Name, address, and taxpayer identification number of the person liable for the tax imposed on the vehicle;
Date on which such vehicle was first used on the public highways in the U.S. during the taxable period (or a statement that the current entry is the first use);
Acknowledgment by the person liable for the tax imposed on such vehicle that the willful use of the declaration to evade or defeat the tax will subject such person to a fine and/or imprisonment; and
Signature of the person liable for the tax imposed on such vehicle.
Drivers at the wheel of a truck that operates in the U.S. after Sept. 3 must carry proof of the HVUT payment or filing (a stamped Schedule 1), and present it to a U.S. Customs official upon request.
More HVUT tips
There is some other advice to consider as well.
First, look into the option of a tax suspension. If a carrier believes that a taxable vehicle will operate in the U.S. 5,000 miles or less during the tax year, the carrier can suspend the tax. This means that the HVUT is filed, but no tax is due. If the vehicle ends up traveling more than 5,000 miles during the year, an amended filing is required along with the HVUT payment.
While e-filing is required when dealing with 25 or more vehicles, it’s also a good idea for carriers of all sizes to file electronically for accurate and timely returns.
And ensure that drivers carry the proof of filing or a written declaration in the vehicle, to present to enforcement teams.
How and when you file and pay, or whether you’re able to suspend the tax, will depend on the extent of your operations into the U.S. The filing process for the HVUT is relatively easy to complete, but the requirement to carry proof of filing, a proof of payment, or a written declaration in vehicles has added another level of compliance.
Carriers can lose their ability to operate into the U.S. if they fail to address their HVUT obligations.
Visit www.irs.gov/truckers for more details on the tax, including forms and instructions, and a listing of e-file providers. J. J. Keller & Associates, Inc. is an e-file provider. Visit us at www.2290online.com.