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Form 2290 Leased Vehicles

If you operate a trucking business, you are likely familiar with the IRS Form 2290 used to report and pay the Heavy Vehicle Use Tax (HVUT). However, if you lease a truck, there are some important considerations you should know about when it comes to filing this form.

When you lease a qualifying heavy vehicle to a lessee, the lessee is responsible for paying the HVUT. However, there are a few different scenarios that could apply, depending on the length of the lease and the weight of the vehicle.

Short-Term Leases

If you lease a vehicle for less than 30 days, the lessee is not required to pay the HVUT. In this case, the lessor (you) is responsible for reporting and paying the tax using Form 2290.

Long-Term Leases

If you lease a vehicle for 30 days or more, the lessee is responsible for paying the HVUT. However, you as the lessor are still required to report the vehicle on Form 2290, indicating that it is a leased vehicle. You must also provide the lessee with a copy of the Form 2290 Schedule 1.

In addition, if the vehicle is leased for an entire tax period (July 1st through June 30th of the following year), the lessee must report and pay the HVUT for the entire tax period. However, if the vehicle is leased for only part of the tax period, the lessee must prorate the tax based on the number of months it will be used.

Calculating the Prorated Tax

To calculate the prorated tax, the lessee must divide the number of months the vehicle will be used during the tax period by 12 (the total number of months in the tax period), and then multiply that by the full tax amount.

For example, if a vehicle is leased for six months of the tax period, the prorated tax would be calculated as follows: 6/12 x full tax amount = prorated tax amount.

It’s important for both lessors and lessees to understand the HVUT requirements for leased vehicles to avoid potential penalties and fines. If you have questions or need assistance with filing Form 2290, consult with a qualified tax professional.