The Heavy Highway Vehicle Use Tax has several names including Federal Highway Use Tax, FHUT, 2290, or even “Road Taxes”. ATBS receives calls year-round from owner-operators asking about this tax, often stressed or concerned about the conflicting messages they receive. It’s an important tax for owner-operators to be aware of and to be prepared to address every year.
What you need to know about "Road Taxes" - the Heavy Highway Vehicle Use Tax (FHUT)
Background
The Heavy Highway Vehicle Use Tax is a tax imposed yearly by the IRS on anyone who owns and operates a heavy highway vehicle (Class 6, 7, and 8 trucks are included) with a taxable gross weight of 55,000 lbs. or more on public roads. Taxable gross weight is a combination of the following:
The actual unloaded weight of your truck fully equipped.
The actual unloaded weight of any trailer or semitrailer fully equipped.
The weight of the maximum load typically carried on your truck and trailer(s).
These taxes currently have a maximum of $550 per year (taxes increase as the taxable gross weight of the vehicle increases), and they are used for highway construction and maintenance.
When you file a Form 2290, you must provide an Employer Identification Number (EIN) as opposed to your Social Security Number. This is true even if you have not established a business entity and are a sole proprietor and conduct business through your Social Security Number. If you don’t already have an EIN, you can apply online for free through the EIN section of the IRS website, or contact us for assistance.
Deadline to File
The FHUT tax season runs from July 1st until June 30th of each year, and is reported using the IRS Form 2290. The form must be filed on the first month that the vehicle is used on public highways, not when the vehicle is registered. The way that works is if you use your truck in July, then you must file your Form 2290 between July 1st and August 31st. However, if you are using your vehicle after July 31st, then you must file your form by the last day of the month following the month of the vehicle’s first use; your taxes will be prorated for the year.
If you stop using, get rid of, or sell your vehicle halfway through the season, you can get a refund for part of the calendar year. Using IRS Form 8849 and a Schedule 6 will let you do that. If you have questions about the deadline to file the FHUT tax, please give us a call at 866-920-2827.
Lease Purchase Program
Often ATBS is asked, “What if I am not the registered owner of the truck, but am leasing the truck through a lease purchase program, another lease program through my carrier, or a 3rd party leasing company?” In this situation, if the lease agreement you signed states that you are liable for all taxes involving the vehicle then you are liable for this tax.
Generally speaking, most carriers with a lease purchase program, and some 3rd party truck leasing companies, will file the 2290 on the vehicle. Since they are the registered owner during the term of the lease agreement they are ultimately liable. But often they will deduct from the contractor a fee to cover the tax. In some cases, you may still have to obtain an EIN, file, and pay the 2290 tax if the lease terms dictate that you do so.
The best practice is to clarify this with your carrier or leasing company prior to lease signing. If you are being asked by your carrier, or possible other agencies, for proof of payment of the 2290, you will need to produce Schedule 1 of the Form 2290 that is stamped “paid” by the IRS. Make sure you obtain and keep a copy of this in your permit book.
Penalties for Not Filing and Paying
As with most taxes, if the Heavy Vehicle Use Tax is not filed on time and appropriately paid there will be penalties and interest imposed by the IRS. Interest accrues monthly, and as a result, what started out as a flat $550 tax can increase by hundreds of dollars very quickly. Operationally, even though your truck may not be impounded, you may be put out of service if you cannot provide proof of payment (stamped Schedule 1) of the 2290 to your carrier or governmental agencies. The ramifications of skipping this tax are obviously not worthwhile since they can result in lost revenue of thousands of dollars.
Partial Payment
The IRS requires a full payment of the Heavy Vehicle Use Tax. Partial payments will not be accepted and may result in penalties and interest being imposed.
If you are having trouble filing your 2290, visit our friends over at ExpressTruckTax, the leading 2290 e-filing solution in the trucking industry!
Over 150,000 owner-operators have made the choice to hire ATBS over the past 25 years. We offer a variety of services including accounting, bookkeeping, and tax preparation. We also offer unlimited business consulting for our RumbleStrip Professional clients. A dedicated business consultant will help you keep your business “between the lines,” just like rumblestrips on the highway. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.
