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).
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.
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.
You can efile your form 2290 at www.YourTruckTax.com and have your schedule-1 in minutes.
