.webp)
11-24-2024
Truck Taxes Applicable for Truckers – 2025
.webp){kind=link}
.webp){kind=link}
In this blog we explore the various taxes truck owners must pay, tax rates, due dates, and exemptions.
Truck owners, whether owner-operators or fleet managers, face unique tax obligations. Understanding these taxes is essential for compliance and maximizing deductions.
1. Heavy Vehicle Use Tax (HVUT)
Source: https://www.irs.gov/businesses/small-businesses-self-employed/trucking-tax-center
The Heavy Vehicle Use Tax (HVUT) is an annual federal tax imposed on trucks, buses, and other heavy vehicles that weigh 55,000 pounds or more. This tax is used to fund highway maintenance.
Tax Rate:
Vehicles weighing 55,000–75,000 pounds: $100 plus $22 for every 1,000 pounds over 55,000.
Maximum tax: $550 for vehicles over 75,000 pounds.
Due Date:
The HVUT is filed annually on Form 2290. For vehicles in use from July 1, the deadline is August 31 of the same year.
How to File:
Truck owners must file Form 2290 electronically if they have 25 or more vehicles. A stamped Schedule 1 from the IRS is required to register a vehicle.
2. Federal Excise Tax on Trucks
Tax Rate:
Vehicles weighing 55,000–75,000 pounds: $100 plus $22 for every 1,000 pounds over 55,000.
Maximum tax: $550 for vehicles over 75,000 pounds.
Due Date:
The HVUT is filed annually on Form 2290. For vehicles in use from July 1, the deadline is August 31 of the same year.
Truck owners must file Form 2290 electronically if they have 25 or more vehicles. A stamped Schedule 1 from the IRS is required to register a vehicle.
The federal government imposes a tax on the sale of trucks and tractors. This tax applies to the first retail sale after a vehicle's manufacture or production but does not apply to resales or long-term leases.
Tax Rate:
According to IRS Code Section 4051, a 12% tax is imposed on the sales price of truck chassis that exceed 33,000 pounds.Due Date:
The due date depends on the month of the sale:Sales that take place in January, February, and March are due by April 30th.
Sales during April, May, and June are due by July 31st.
Sales in July, August, and September are due by October 31st.
Sales in October, November, and December are due by January 31st.
This excise tax is paid using Form 720. The electronic filing method is the IRS-recommended and preferred option.
3. Income Tax
Truck owners operating as sole proprietors, LLCs, or corporations are required to pay federal income tax based on their net earnings.
Tax Rate:
Federal income tax rates vary based on income, ranging from 10% to 37%.Due Date:
Quarterly estimated payments are due on April 15, June 15, September 15, and January 15 of the following year.Deductions:
Truck owners can claim deductions for fuel, repairs, insurance, and per diem expenses for meals and lodging during trips.
4. Self-Employment Tax
Owner-operators are considered self-employed and must pay self-employment tax, which funds Social Security and Medicare.
Tax Rate:
Social Security: 12.4%
Medicare: 2.9%
Total: 15.3% on net earnings.
Due Date:
Self-employment taxes are included in quarterly estimated payments.Deduction:
Truck owners can deduct half of their self-employment tax when calculating federal income taxes.
5. Fuel Tax
Fuel tax is levied on every gallon of diesel purchased. Truck owners must track and report fuel use quarterly under the International Fuel Tax Agreement (IFTA).
Tax Rate:
Varies by state, ranging from $0.20 to $0.60 per gallon.Due Date:
Quarterly filings are due on April 30, July 31, October 31, and January 31.
Truck owners report total miles driven and fuel purchased in each jurisdiction to determine taxes owed.
6. State and Local Taxes
Truck owners may owe additional taxes based on state and local regulations. Common examples include licensing fees, property tax on equipment, and registration fees.
Tax Rate:
Rates and requirements vary widely by state.Due Date:
Varies based on the type of tax and jurisdiction.
Some states impose weight-mile taxes, which are calculated based on the weight of the truck and miles travelled within the state.
Exemptions Available for Truck Taxes
Truck owners may qualify for exemptions or reduced rates under specific circumstances.
1. HVUT Exemptions
Vehicles driving less than 5,000 miles annually (7,500 for agricultural vehicles) are exempt from HVUT.
Government, nonprofit, and certain agricultural vehicles are also exempt.
2. IFTA Exemptions
Vehicles that operate only within a single state and do not cross state borders may be exempt from IFTA reporting.
Off-road fuel use is not subject to fuel tax, and truck owners can claim refunds for such usage.
3. State Tax Exemptions
Certain states offer property tax reductions for trucks used for agricultural purposes.
Electric and alternative fuel vehicles may qualify for tax credits or reduced registration fees.
WRAP:
Truck owners must navigate several layers of taxation, including HVUT, income tax, self-employment tax, and state-specific obligations.
While these taxes can seem overwhelming, proper planning and knowledge of exemptions can help minimize the financial burden.
File your truck excise tax online with eFile720!