Purchasing a vehicle claimed under the HVUT 5,000-mile suspension

DATE POSTED: 3/18/2021

HVUT 5,000-mile suspension

Many of you know you can claim a tax suspension from the federal heavy vehicle use tax (HVUT) if you expect taxable vehicles to operate 5,000 miles or fewer during the tax year. You still need to file the HVUT, but you aren’t required to pay any tax. If later in the year you end up operating the vehicle more than 5,000 miles, you file an amendment and pay the entire tax due.

But what are your options regarding the suspension if you purchase a taxable vehicle and the previous owner had claimed a tax suspension? The answer may surprise you.

HVUT and buying a truck under suspension

What you can do in this situation may depend on what happened with this vehicle prior to you taking ownership of it.

Mileage use limit means the use of a vehicle on public highways 5,000 miles or less (7,500 miles or less for agricultural vehicles). The mileage use limit applies to the total mileage a vehicle is used during a tax period, regardless of the number of owners. That’s right: If the previous owner claimed a suspension, and operated the vehicle, the previous owner’s accrued miles count towards the 5,000 miles when you take ownership of the vehicle.

Know your options

If the vehicle was acquired from a dealer, and the vehicle was never used on a public roadway prior, you could possibly file a suspension of tax. This only applies if you don’t expect it to be operated more than 5,000 miles during the tax year (and you don’t have any extra miles to count because the vehicle wasn’t operated prior).

If it came from a private seller, it depends. If the previous owners had filed a suspension, the previous owners would have to provide the following information to you:

  • The seller’s name, address, and Employer Identification Number (EIN);
  • Vehicle identification number (VIN);
  • Date of the sale;
  • Odometer reading at the beginning of the period;
  • Odometer reading at the time of sale; and
  • Your name, address, and EIN.

You would attach this statement to Form 2290 and file for a suspension, provided you still don’t think it would be operated more than 5,000 miles.

If the previous owners filed a suspension, you may be liable for the tax. This will be the case if you have operated the vehicle over the 5,000-mile limit, and the previous owner had provided you with the required statement mentioned above. You’d be liable for the tax for the entire tax year (the regulation says “entire tax period”).

However, if the previous owner doesn’t provide the required statement to you, the previous owner is also liable for the tax for that period.

Finally, the last scenario is if the previous owners operated the taxable vehicle more than 5,000 miles in the tax year, and you acquired the vehicle and used it in June, then it works like any other acquired vehicle — you pay a prorated tax for June only.

Use the suspension wisely

Filing your Heavy Vehicle Use Tax is usually a relatively easy process as the tax is pretty straightforward to file. But when it comes to filing a suspension of tax for vehicles operated 5,000 miles or less during the tax year, along with changes in ownership, it can get complicated. Make sure you understand what needs to be done when you acquire a taxable vehicle if you wish to claim a suspension of the tax.

 

Fast and Easy Heavy Vehicle Use Tax (HVUT) Filing

If you do have to file an amendment, J. J. Keller's 2290online.com is the fastest way to e‑file IRS Form 2290 (Heavy Vehicle Use Tax) and get your stamped Schedule 1 — which is used as proof of payment to annually register your vehicles with your state. Whether you're an owner/operator or a fleet of thousands, you can have the benefits of e‑filing with J. J. Keller's proven technology.