What are they?
Heavy Vehicle Use Tax
(or HVUT) is, just as it sounds, an annual tax on Heavy Vehicles that operate on public highways. The IRS Form 2290
is what is used by the government to collect this tax. It is a fee that the IRS requires all vehicles with registered gross weights equal to or exceeding 55,000 pounds to pay annually on heavy vehicles operating on public highways. The tax collected is a significant source of transportation funding in the U.S. In 2006 alone, the HVUT generated more than $1.4 billion in Federal Highway Trust Fund (HTF) revenue.
IFTA is short for the International Fuel Tax Agreement
, which is an agreement between American and Canadian jurisdictions to simplify the reporting of motor fuel taxes purchased and consumed. Under this agreement, one quarterly fuel use tax report is filed representing miles traveled, fuel purchased and used, and taxes/credits due in each member jurisdiction. The base jurisdiction then distributes the funds to each affected jurisdiction according to information contained in the quarterly fuel use tax reports. An interstate motor carrier operating “qualified motor vehicles” between at least 2 member jurisdictions (The 48 contiguous states of the US and 10 Canadian provinces) must have an International Fuel Tax Agreement
(IFTA) license and decals issued by their base jurisdiction. If you have the IFTA
license, you must file the Quarterly IFTA Return to your base jurisdiction.
How do they Work?
Besides the fact that they are both fees imposed on heavy vehicles, these are both similar in that they are both very complicated through the traditional paper-filing process. The complications with IRS Form 2290
come from the difficulty of actually filing one. The trouble with IFTA
is that it is an incredibly detailed system.
IFTA requires drivers of Heavy Vehicles to keep trip logs of miles traveled as well as how much fuel was purchased
in each state or province. IFTA must be filed quarterly
and the filing date is the 30th of the following month. These trip logs are difficult to keep up because they require very detailed information. As mentioned earlier, these forms are then filed with their base jurisdiction. Most states do not provide E-Filing as of yet. Therefore most of the time these forms are mailed to the state.
One Solution for Both