Truck
Registration and Taxes
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Before
you can legally operate your big rig in
interstate commerce, you must: file Form
2290, Heavy Vehicle Use Tax, with the
IRS, register the truck with IRP,register
the truck with SSR, and register with
IFTA.
Vehicle Registration. The Intermodal Surface
Transportation Act of 1991 created the
International Registration Plan (IRP),
which is a streamlined system for truck
registration and fuel tax reporting. Every
state is a member of IRP, and your base
(home) state's motor vehicle division
is responsible for the licensing and registration
of motor carriers under the IRP and the
International Fuel Tax Agreement (IFTA).
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Although
you must register in every state you operate your
truck, and each state collects vehicle registration
fees and various taxes, under IRP you fill out
one form indicating the states you will drive
through and pay the registration fee to your base
state. Only one license plate and one cab card
is issued for each vehicle registered under IRP.
The vehicle is known as an apportionable vehicle.
Your cab card lists the states where your vehicle
is apportioned. If you have to drive through a
state where your truck is not registered, you
can obtain a temporary registration.
In addition to IRP, you also need Single State
Registration System(SSRS), which gives you the
authority to use your truck and trailer to transport
freight in these states. Once again, your truck
must be registered under SSR in every state
you operate your truck. Only 40 states participate
in SSR. If your base state is not a member,
you must choose a participating state in which
to obtain your SSRS credentials. Kentucky, New
Mexico, New York, and Oregon require additional
tax credentials.
The Federal Highway Use Tax must be filed for
heavy vehicles if your truck's taxable gross
weight exceeds 55,000 pounds. The tax period
runs from July 1 to June 30, and the tax is
due on August 31 each year. However, when you
buy a truck, you must file this form and pay
the tax to the IRS by the last day of the month
following the month you made the purchase. You
can pay the tax in one annual payment or in
quarterly installments.
If you fail to pay the tax on time, the IRS
will assess penalties and late fees.
After the IRS has processed your Form 2290,
you will receive a stamped copy for your records.
Also keep the canceled check as proof of payment
with your records.
The IRS provides Form 2290, Heavy Vehicle Use
Tax Return, and it is self-explanatory. However,
if you prefer, your accountant or a permit service
can file the form for you.
The International Fuel Tax Agreement (IFTA)
regulates the administration of road and fuel
taxes among member jurisdictions. The purpose
of IFTA is to establish and maintain the concept
of one fuel use license and administering base
jurisdiction for each licensee. A qualified
motor vehicle is a motor vehicle used, designed,
or maintained for transportation of persons
or property and:
Having
two axles and a gross vehicle weight or registered
gross vehicle weight exceeding 26,000 pounds;
or
Having three or more axles regardless of weight;
or
is used in combination, when such combination
exceeds 26,000 pounds. Source: Arizona Motor
Carrier Services.
The Owner-Operator (licensee) receives one fuel
tax license, which is issued by the base state
and authorizes travel in all IFTA jurisdictions.
The IFTA license is valid for a calendar year,
from January 1 to December 31, requiring annual
renewals. You (the licensee) must file quarterly
fuel tax returns reporting all miles accumulated
by your truck in each jurisdiction (member state)
to your base (home) state. The report must show
all miles traveled and fuel purchased and consumed
in each IFTA jurisdiction. Your base (home)
jurisdiction will collect and transmit fees
to other member jurisdictions or will issue
a refund if you overpaid. Fuel tax audits are
only performed by the base state.
Under this system, you must carefully plan and
document your fuel usage and purchases and miles
traveled in each state. For example, if you
purchase 100 gallons of fuel but only use 50
in that jurisdiction, you are due a fuel tax
credit. If you used 100 gallons but purchased
only 50 gallons of fuel
in that jurisdiction, you owe tax.
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