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Vehicle title transfer is the process where the title of the property of a vehicle is transferred from someone to another. This is generally the case when selling your auto to someone If you own, drive, or manage an industrial vehicle in the United States of America, then you need to pay commercial vehicle taxes. While these taxes are criticized by lots of individuals for their sheer existence, there is a good reason behind why these taxes were introduced to begin with. There are two basic types of commercial vehicle taxes – highway use tax and heavy highway use tax. These taxes need to be filed using IRS form 2290, and thus are federal taxes. Before we go into details about these taxes, let us see what IRS means by a “commercial vehicle.”.

According to the IRS, any truck that has a gross weight of 55,000 lbs or greater is considered a commercial vehicle, and if it travels a minimum of 5000 miles each year on public highways, it is required to pay the commercial vehicle taxes in the form of highway use tax and heavy highway use tax. The Internal Revenue Service (IRS) collects these taxes and then distributes it back between the states to care for and develop highways and other roads.

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The highway use tax is assessed on an annual basis by the IRS on commercial vehicles (as defined above) that travel 5000 miles or more on public highways in a year. The existing highway-use taxes are fixed at $ 100 plus an additional $ 1000 per 1000 pounds over 55,000 lbs, and at $ 550 for vehicles that have a gross weight of over 75,000 lbs. This tax is levied as commercial vehicles are heavy and can cause significant wear to public roads when traveled for the stipulated distance annually. Not just that, these vehicles can cause more harm than other if involved in accidents with regular vehicles – both to the highway itself and other trucks. These taxes are used to install new highways and roads, and maintain these and existing roadways.

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The heavy highway use tax is the same as the general highway use tax, i.e. it abides by the same rules. While these commercial vehicle taxes are imposed on business and technicians that operate entire fleets of commercial vehicles, there are many groups that are exempt from the highway use tax and heavy highway use tax. These include state and local governments, essential services like the fire department, the police department, ambulance associations and rescue squads, the federal government and the American Red Cross. These official bodies apart, commercial vehicles that do not travel more than 5000 miles each year do not need to pay these taxes. For you to be exempt, the user of the vehicle must do mileage reporting and submit all sheets to the IRS every year.

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Other vehicles that are excluded from the commercial vehicle taxes include agricultural vehicles that do not travel over 7500 miles per year, blood collector vehicles, and vehicles that are allowed to travel on public highways but are not considered commercial – like vehicles that transport mobile machinery, off road vehicles etc. You can file your IRS form 2290 either manually or online. The simpler method is to file online, and be done with it. Ensure that you have copies of your commercial vehicle’s registration and renewal certificates, as you have to attach them to the form.