Is Heavy Vehicle Use Tax Deductible?

Running a motor carrier business takes substantial investment funds, including fleet purchases, maintenance, and tax payments. With additional expenses like the New York highway use tax (NYHUT), some companies find managing tax information complicated. 

Still, motor-based businesses aren’t only facing tax-related administrative difficulties; sometimes, they may need tax relief via recent policy changes, as well. Is heavy vehicle use tax deductible? 

This post will explore the reasons behind different tax rules on vehicles so that you can use these to your advantage.

The Reasons Heavy Truck Taxes Exist

Paved roadways don’t last forever. For one thing, they take on regular wear and tear from family sedans and SUVs. However, an overweight business vehicle will cause substantially more roadway damage.

State road maintenance funding and poor weather conditions can accelerate the formation of potholes, cracks, and other road issues. Specifically, vehicles that exceed 55,000 pounds cause more damage due to heavier axle loads. Here’s more about the taxes on these big vehicles:

Misrecorded Numbers on Heavy Vehicles

Many government officials and websites misattribute the results of a 1962 examination by The American Association of State Highways and Transportation Officials. While the study found roadways sustained more damage from heavier vehicles, it wasn’t the exaggerated metrics online or in some reports. Statements claiming a single tractor-trailer can cause 160,000 times the damage of a sedan are working on outdated and factually misunderstood information.

Thankfully, the Government Accountability Office and the National Academy of Sciences clarified this misunderstanding in 1979. The source said that it isn’t all heavy vehicles causing substantial damage but rather vehicles exceeding state and federal weight limits. However, remember that this data is 40 to 60 years old already and may not account for modern advances in pavement and vehicular technology.

Back to the Present For Heavy Vehicle Use Taxes

Is heavy vehicle use tax deductible today because of the above misunderstanding? In part, this seems plausible. 

The data still confirms that vehicles that reach or exceed state and federal vehicular weight limits will damage roads more than others. Such vehicles put pressure on the vehicle’s axles, creating pressure points that press on the road below. The road conditions only worsen if the state hasn’t funded reasonable roadway maintenance.

Carrier companies must take ownership of their part in roadway safety and maintenance. The highway use tax aims at this accountability and raises money for roadway care.

How HUT Can Affect You Differently

Federal regulations state that you must pay the federal HUT if your vehicle is 55,000 pounds or more. The law does offer leeway for certain types of carriers, such as:

• Qualified blood collector vehicles
• Commercial vehicles with less than 5,000 annual travel miles
• Agricultural vehicles with less than 7,500 annual travel miles
• Vehicles legislation does not consider highway motor vehicles (e.g., mobile machinery)

States may also have their own HUT-related regulations for using their highways. For example, the NYHUT applies to vehicles over 18,000 pounds instead of 55,000 pounds. Check each state you intend to travel through for any HUT or other policy in addition to federal requirements.

How To Gain From Your Tax Deductions

In 2022, new tax laws gave heavy vehicle carriers more flexibility and leeway with their deduction filing. So, is heavy vehicle use tax deductible in any way? Yes, heavy vehicles over 6,000 pounds in loaded gross weight can deduct HUT tax with other maintenance and depreciation deductions. 

Look Out For Expected IRS Changes

The IRS intends to remove some bonus depreciation by 2026, so take advantage of the savings while you can. To use it, fill out Part I of Form 4562 detailing your Section 179 deductions. The 2022 law allows you to immediately deduct business expenses for depreciable assets, such as your heavy fleet.

Read the Fine Print On Your Returns

These deductions are in the same tax year you purchased the vehicle, which you must use over 50% of the time for business purposes. To use it for a vehicle you previously bought, you’ll need to amend the tax return for the year you purchased it and all the years since. 

You can deduct several expenses, such as:

• Licensing fees
• Fuel tax payments
• HUT tax payments
• Insurance premiums

Pay Attention to the Details and Track Them

You need detailed information regarding the vehicles you want to use for tax deductions. Mileage tracking, receipts, and many other record-keeping habits can help you receive a substantial tax rebate.

When is heavy vehicle use tax deductible? Asking these types of questions allows you to look deeper into your tax requirements. If you’re busy or unsure how the tax code works, don’t wait long to seek professional assistance.

Do you want help learning how to file a highway use tax or taking advantage of Section 179? Speak with our Live Experts or contact Federal Motor Carrier Authority Online Filings today.