Last fall, we reported on the possible increased enforcement by US officials on Canadian firms regarding payment of the federal heavy vehicle use tax.
This tax is required for all Canadian trucking firms that meet the federal US 5,000- mile threshold. Heightened enforcement of the tax could lead to costly problems for companies whose vehicles are not in compliance with requirements set forth by the IRS.
This memo (click here to access) prepared by the tax firm Deloitte explains the tax in more detail as well as compliance and potential changes to the enforcement of filing requirements imposed upon foreign vehicles entering the United States.
To access Form 2290, the Heavy Highway Vehicle Use Tax Return from the IRS, click here.
Proof of payment of the tax must be presented to U.S. Customs officials upon entry of such taxable vehicle into the U.S. If the operator is unable to provide proof of payment of the tax, then the vehicle may be denied entry into the U.S.
OTA and CTA has received calls from western carrier members confirming the heightened interest from US officials regarding payment of the HVUT. OTA would advise its members to have payment in order if they are doing business in the US.
At this point the IRS is still considering what form proof of payment will take. In the future it may take the form of some sort of decal that must be displayed on the trucks. In the meantime, companies could call the IRS (267) 941-1000 and ask them to fax acknowledgement of payment which can be kept with the trucks that cross the border. This has reportedly been successful for some carriers so far.