Highway Use Tax

What is Highway Use Tax

The Highway Use Tax (HUT) is a tax levied on motor carriers and trucking companies based on the miles traveled on public highways. Its primary purpose is to fund highway maintenance and improvement projects, making sure the infrastructure can support the heavy usage by commercial vehicles.
The tax presents the principle that those who use public goods should contribute to their upkeep, particularly when their use incurs greater wear and tear on roadways.
Learn about Heavy Vehicle Use Tax – form 2290 here.

Jurisdictional Application

The implementation of the HUT varies by jurisdiction, with each state or province setting its own rates, exemptions, and filing requirements. Notably, states like New York, Oregon, Kentucky, and New Mexico have established their own versions of the tax, each with unique guidelines for compliance.

Purpose of the Highway Use Tax

The HUT is instrumental in generating revenue for the maintenance and enhancement of highway infrastructure. Roads and bridges require significant investment to remain safe and functional, and the tax collected from commercial operators helps to finance these needs. By allocating the cost to those who benefit directly from the highways, the HUT ensures a sustainable funding model for essential infrastructure projects.

Key Features

• Mileage-Based Taxation: The HUT is typically calculated based on the number of miles commercial vehicles travel on public highways within a jurisdiction.
• Vehicle Weight Consideration: Some jurisdictions adjust the tax rate based on the weight of the vehicle, reflecting the greater impact heavier vehicles have on road wear.
• Dedicated Revenue Stream: Funds collected through the HUT are often earmarked specifically for transportation-related projects, including road repairs, bridge maintenance, and highway safety improvements.

New York Highway Use Tax (HUT)

In New York, the Highway Use Tax (HUT) applies to motor carriers operating certain motor vehicles on New York State public highways. The tax is based on the total miles traveled in New York and varies depending on the weight of the vehicle. This tax is part of New York’s effort to ensure that operators of heavy vehicles pay for their fair share of highway maintenance.

Key Features:

• Taxable Vehicles: The HUT applies to vehicles with a gross weight over 18,000 pounds.
• Tax Rates: Rates are determined by the weight of the motor vehicle and the miles traveled on New York highways.
• Compliance: Carriers must obtain a certificate of registration and a decal for each vehicle subject to the HUT.
• Filing Requirements: Carriers are required to file quarterly HUT returns with the New York State Department of Taxation and Finance.

New York HUT Exemptions

Certain vehicles are excluded from or exempt from the Highway Use Tax (HUT) in New York if they are used for their intended purposes or exclusively for exempt activities. Excluded vehicles might include omnibuses, power shovels, and road-building machines, among others, that do not transport property or passengers on public highways. Vehicles exempt from HUT include those engaged exclusively in the transportation of U.S. mail, vehicles controlled by government entities, and those used for farming or transporting agricultural products.

Oregon Weight-Mile Tax

Oregon administers a unique Weight-Mile Tax, targeting vehicles operating on public roads with a weight exceeding 26,000 pounds. This tax is calculated based on the miles traveled on Oregon roads and the weight of the vehicle, emphasizing the pay-per-use principle for infrastructure financing.

Important Considerations:

• Payment and Reporting: Carriers must report miles traveled and pay taxes on a quarterly basis.
• Tax Rates: The tax rate increases with the vehicle weight, reflecting the higher impact heavier vehicles have on road infrastructure.
• Permits and Transponders: Oregon requires carriers to obtain a weight-mile tax account, and vehicles may be required to use an Oregon Department of Transportation (ODOT) transponder for distance reporting.
• Exemptions and Credits: Certain vehicles and operations may be eligible for exemptions or credits against the Weight-Mile Tax.

Kentucky Highway Use Tax (KYU)

Kentucky imposes a highway use tax known as the Kentucky Highway Use Tax (KYU), which is a weight-distance tax on motor carriers operating commercial vehicles on Kentucky public highways. The KYU tax is based on the miles traveled by these vehicles within the state and the weight of the vehicle. It applies to commercial vehicles with a gross weight of 60,000 pounds or more. Carriers must register for a KYU number, which is used to report and pay the taxes due.

Key aspects of the KYU include:

• Tax Rate: The tax rate is determined by the weight of the vehicle and the miles traveled within Kentucky.
• Filing Requirements: Carriers must file quarterly returns to report the miles traveled in Kentucky and pay the appropriate tax.
• Registration: Carriers operating in Kentucky must obtain a KYU number as part of their tax compliance requirements.

New Mexico Weight Distance Tax

New Mexico’s version of the highway use tax is the Weight Distance Tax, which applies to owners, operators, or registrants of intrastate and interstate commercial vehicles with a declared gross vehicle weight of more than 26,000 pounds. This tax is calculated based on the weight of the vehicle and the distance traveled on New Mexico highways.

Important details about New Mexico’s Weight Distance Tax include:

• Tax Rates: The rates vary depending on the vehicle’s weight, with higher rates applied to heavier vehicles.
• Reporting Periods: Taxpayers must file weight distance tax reports on a quarterly basis, and payments must be made accordingly.
• Permit Requirement: Vehicles subject to this tax must have a New Mexico Weight Distance Electronic Permit for each qualified motor vehicle.

Compliance and Reporting

Compliance with HUT regulations requires thorough record-keeping and timely tax filing. Carriers must register with the appropriate state agencies, obtain any necessary permits or decals, and submit periodic tax returns detailing their vehicle usage. The complexity of compliance can vary significantly between jurisdictions, necessitating careful attention to each state’s requirements.

External Links

New York Highway Use Tax Certificate of Registration – Official Website – click here.

Oregon Weight-Mile Tax – For more information – click here.
Oregon Application to File Quarterly Weight-Mile Tax Reports (form 9030) – click here. [PDF]

Kentucky Weight Distance (KYU) – click here.
Kentucky KYU Page for Carriers – click here.