The IRS filed a Temporary and Proposed Regulations notice in the Federal Register on July 15th 2011 to officially postpone the deadline for the payment and filing of the Highway Use Tax. The Highway Use Tax was due on August 30th, 2011 but the deadline has now been pushed to November 30th, 2011. According to a press release on the IRS website, the reason for this postponement was because this Highway Use Tax is set to lapse on September 30th, 2011. Since Congress may enact new changes and modifications to this tax after its expiration, the IRS has chosen to extend the deadline so that truck owners will not need to file tax returns twice to accommodate any such changes, postponing their IRS payments due. Following this extension of the tax deadline, the IRS will not receive any payments for the Highway Use tax or accept any related tax returns prior to November 1st, 2011. The truck owners affected by this extension are those for trucks that were in used in July and trucks that were first used in August and September.
About the Highway Use Tax
The Highway Use Tax is a tax paid by owners of heavy commercial vehicles including trucks, buses, and truck tractors that have a gross taxable weight of 55,000 pounds and over. These truck owners are required to annually pay a Highway Use Tax customarily on or before August 30th of every tax year. The tax is a levy for the use of interstate highways that are under the Federal government. According to the current tax code, qualifying vehicles pay a maximum of $550.00 annually. The tax payable increases with the weight of the vehicle. There are also lower rates applicable to various categories of vehicles, including those that use the highways in a minimal way, vehicles used for agricultural purposes, vehicles used for logging, vehicles transferred within a year, and those that are purchased after June 30th of a given year. The owners of these qualifying vehicles are required to file a Form 2290, “Heavy Highway Vehicle Use Form” and pay the required taxes on or before the August deadline. In 2010, the IRS collected a total of $886 million from about 650,000 truck and bus owners who filed a Highway Use Tax return.
State Regulations to Enforce the Tax
To ensure that the qualifying truck and bus owners pay the required Highway Use Tax, the Federal law requires the state authorities to confirm proof of payment of this tax before registering the vehicles. The IRS stamps the Schedule 1 on receipt of the Highway Use Tax and this stamped Schedule 1 is what is used as proof of payment when seeking state registration.
Adjustments to these State Regulations
Given that the tax deadline has been extended, the IRS has adjusted the state rules for the registration of qualifying trucks. Trucks requiring registration before the extended deadline of November 2011 can now use the prior year’s stamped Schedule 1 as proof of payment. For the qualifying vehicles purchased after June 30th 2011 – and therefore do not have the prior year stamped Schedule 1, the IRS has allowed states to register such vehicles without any payment proof for the Highway Use Tax. These truck owners are however, required to provide proof that the owner purchased the truck within a period of 150 days.