New Law Changes Highway Use Tax Rules: installment option excreted

The IRS has reminded truckers and other owners of heavy highway vehicles that the installment option for paying federal taxes using the highway is no longer available. This change was in the American Jobs Creation Act of 2004 refers and applies to filers of Form 2290, Heavy Highway Vehicle Use tax return.

Beginning with the Form 2290 for the fiscal year July 1 2005 and ending June 30, 2006, the balance of the form must be paid in full by the date specifiedreturn. In most cases, the deadline for submission of returns and payment of taxes due the 31st August 2005. Payment can be made by check, money order or electronically through the electrical charge (EFTPS).

In recent years, taxpayers who have timely submitted Form 2290 to decide to pay the tax in four equal installments. Normally, these payments in installments on the last day of August, December, March and June were due. About 148,000 taxpayers chose this option last year in 2004.

In general,Highway use tax for trucks, tractors and buses with a gross taxable weight of 55,000 pounds or more. Normally, vans, pickups and panel trucks are not taxable because they fall below the threshold of £ 55,000.

For trucks and other taxable vehicles in use in July, the payments made on 31 August. The tax is based on weight and generally in the range of $ 100 to $ 550 per vehicle. A series of special rules, discussed in the instructions for Form 2290, apply to vehicles withminimal road use, logging or agricultural vehicles, vehicles sold during the year and first used on the road in July.

Governments are required to provide proof of payment of federal taxes as a condition of road vehicle registration. Annex 1 of Form 2290 is stamped and returned to filers for this purpose. This process remains unchanged.

The Jobs Act also eliminated reduced rates for vehicles registered in Canada and Mexico. For vehicles withbasic registration in both countries, the rate of 25% below the normal price.

In addition, the Jobs Act made electronic filing mandatory for taxpayers who use the highway tax returns for 25 or more vehicles needed. The availability of electronic filing for Forms 2290 is pending. Taxpayers should continue to submit on paper. The IRS notify taxpayers when the electronic filing program is available.

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