Expected Increase in heavy vehicle use tax fees for 2011-2012

Earlier, IRS announced that form 2290 will not be available for tax year 2011-2012 and that the heavy vehicle use tax will expire by end of September 2011. Later on they made an announcement saying that form 2290 due date has been extended by 90 days, making the due date Nov 30^th 2011, hence some relief for tax payers. Now, another speculation or in other words it is being predicted that as per the new rules and regulations, heavy vehicle use tax fees might go in for a hike. Hence in consideration to this we did our own research and based on the evidence we found, it sure does look that congress is considering raising the fees for heavy vehicle use taxes.

Below are the proposed rules under “Safe and Efficient Transportation Act of 2011”

Section 4 – safe and efficient vehicle charges

(a) In General- Subsection (a) of section 4481 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

‘In the case of the use of any highway motor vehicle described in section 127(i) of title 23, United States Code, in lieu of the rate in the table, the rate shall be equal to the lesser of-

(1) $100 per year, plus $22 for each 1,000 pounds (or function thereof) in excess of 55,000 pounds,

(2) $800 per year.

Now let us focus on the calculation of fee structure changes from previous year 2010-2011 to the current year 2011-2012.

According to the previous years tax calculations, any vehicle weighing 55000 pound pays $100 per year and anything in excess of 55000 would yield, $100+$22 for each 1000 pound in excess of 55000 pounds. A vehicle weighing above 75000+ would have to pay $550 annually.

Based on the proposed rules for HVUT form 2290 for the current year 2011-2012, the calculation for the fee structure would be: $100+ $22 for extra 1000 pounds over 55, 000. But for a 75000+ vehicle which previously paid $550, the current calculation would be: $100 for the first 55,000 lbs. $550 for the 25,000 extra pounds $650 total due for 75,000 lbs and above vehicle.

Also it is mentioned in section 4 that:

EFFECTIVE DATE.—the amendment made by this section shall apply to taxable periods beginning after the date of the enactment of this Act.

What we have mentioned in the article are the proposed changes by the congress which may or may not happen. However, if you have any question or want to learn more about the transformations in heavy vehicle use taxes, please contact IRS authorized e file provider greentax2290.com  at 800-578-2290.