Sep 13 2013

Heavy Vehicle Use Tax (HVUT)

It’s the time of year when trucking companies are filling out Form 2290 and writing out big checks to pay the HVUT (Heavy Vehicle Use Tax) for all their trucks registered at 55,000 lbs. and over.  For most companies, that is an additional tax of $550.00 per truck, on top of all the other taxes trucking companies already get to pay. I thought it would be interesting to look into why trucking companies have to pay the HVUT and exactly where all that money supposedly goes.

The U.S. Department of Transportation, in its most recent Highway Cost Allocation Study, estimated that light single-unit trucks, operating at less than 25,000 pounds, pay 150 percent of their road costs while the heaviest tractor-trailer combination trucks, weighing over 100,000 pounds, pay only 50 percent of their road costs.  The bottom line is that the DOT believes smaller trucks pay more than their fair share in the taxes that are used to build and maintain roads in proportion to how much wear and tear they cause on roads.  On the other hand, they estimate that heavy trucks underpay in taxes in comparison to how much wear and tear they cause on our nation’s roadways.  The HVUT was created to level the playing field and ensure heavier trucks are paying a fairer portion of highway maintenance fees.

The tax generates over $1.0 billion per year, which goes into the Federal Highway Trust Fund (HTF).  According to the Federal Highway Administration, the HTF is used for the following:

  • Highway improvements (e.g., land acquisition and other right-of-way costs, preliminary and construction engineering, construction and reconstruction, resurfacing and restoration costs of roadways and bridges)
  • Highway and bridge maintenance activities
  • Highway and traffic system costs (e.g., traffic control and surveillance systems, snow and ice removal, erosion control, and air quality programs)
  • Highway law enforcement
  • Safety programs (e.g., driver education and training, vehicle inspection programs, and enforcement of vehicle size and weight limitations)
  • Congestion relief projects
  • Debt service
  • Administrative costs (e.g., overhead, research, and engineering)

It all boils down to roadways needing to be maintained and heavier vehicles causing more damage to roads compared to their counterparts.  Road maintenance is important because as recent studies conducted for the Federal Highway Administration demonstrate, highway investment has generated significant positive economic impacts for the nation, including those related to employment, income, productivity, production costs and private capital formation.  I guess the silver lining is that we all benefit from good infrastructure by having a stronger, more productive economy and especially by having a very efficient and well-maintained highway system.

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