You’ve finally done it – you’ve just purchased a used semi-truck. But, as you drive the vehicle off the lot, a nagging question crosses your mind: who’s in charge of paying the Heavy Vehicle Use Tax (HVUT), you or the seller? Sure, you own the truck now, but the seller likely put in a few miles before it became yours. 

The answer? It depends. One thing is for certain though: when you purchase a used vehicle, you can still experience a simple 2290 filing process.

You might be wondering if you have to file a new Form 2290 every time you purchase a vehicle. In short, you do. For each additional truck you purchase after you’ve filed your Form 2290, you’ll need to file again listing only your new vehicle(s). While it can still be a simple 2290 filing process just like the others, this Form 2290 may be slightly different from what you typically file in the summer. 

What If The Previous Owner Filed The Vehicle As Suspended? 

Suspended Vehicles

If a truck doesn’t exceed the mileage limit, which is 5,000 miles (7,500 miles for agricultural vehicles), it falls under the category of a “suspended vehicle,” making the tax liability $0. But, you might be surprised to find out that the mileage use limit applies to the total distance a vehicle operates on public roads during the entire tax year, including the miles it accrued before it was in your possession. 

So, if the previous owner drove 4,000 miles and filed the truck as suspended, then you drive the truck an additional 3,000 miles in the same tax year, the total mileage (7,000 miles) will exceed the mileage use limit and the vehicle will no longer qualify as suspended. When this happens, you, the buyer, will be liable for the entire Heavy Vehicle Use Tax (HVUT).

The Information You Need

When filing Form 2290 for your newly purchased used vehicle, it’s a good idea to get a signed and dated written statement from the previous owner, which you should keep in your records for at least three years. The statement should clarify how they filed their Form 2290 and include the following information:

• The seller’s name, address, and EIN
• The truck’s VIN
• The date of the sale
• The odometer reading at the beginning of the period (typically July)
• The odometer reading at the time of sale
• Your name, address, and EIN

If the previous owner filed the vehicle as suspended, you’ll also need to know the date you first used it (or more accurately, what the IRS considers to be the first use date). This can vary based on a few factors, so be sure to check with your tax professional or the IRS Form 2290 Assisters (866-699-4096) to determine what to indicate as the first use date.  

What If The Previous Owner Already Paid The HVUT?

Calculating Partial-Period Tax

If the vehicle was not suspended when you purchased it and the seller already paid the HVUT for the period, you’ll both pay a partial-period tax, meaning you’ll split that year’s HVUT according to how many months you each drove the vehicle. (The seller can claim a simple 2290 credit for the excess taxes on the next Form 2290 they file, or they can claim a refund on Form 8849.) However, in order to split the tax like this, you must be certain that the seller has already paid taxes for the current tax year, so it’s a good idea to keep a copy of the seller’s stamped Schedule 1 in your records. 

To manually calculate the tax, first, find the number of months from the month after the sale all the way through the end of the tax period (the buyer doesn’t have to pay taxes for the month of the sale). This number will be your numerator, and the denominator will be the total number of months in the tax period (which will almost always be 12, as the period spans from July to June). Once you have this fraction, you can multiply it by the total HVUT for the entire tax year to determine how much you owe. For example:

Say Thomas drove his 85,000 lb semi-truck 7,000 miles between July and November, making the HVUT max out at $550, which he pays in full. On November 4th of the same tax period, he sells the semi-truck to Amanda, who begins driving it immediately and continues doing so for the remainder of the tax period. 
In this scenario, Amanda will only owe taxes from December (the month after she purchased the vehicle) through June (the last month of the tax year), 7 months total. So, she divides the 7 months of her tax liability by the total tax year (12 months). Then, she multiplies that number by $550 to find that she owes $320.83. (Thomas will be able to claim a refund or credit for the same amount.)

While it’s good to know how the IRS lands on this number, there are easier ways to determine your partial-period taxes. If you file a paper Form 2290 return, you can refer to the tables provided at the end of the instructions to get the correct tax value based on your first use date, or for the most simple 2290 filing process, you can turn to a trusted e-file provider. Their software will take care of these details for you and provide a Stamped Schedule 1 in minutes.

Claiming Credit For The Vehicle You Sold

Assuming you already paid the 2290 tax for a given tax year, if you replace a vehicle that was destroyed, stolen, traded in, or sold, you can claim credit for the months between when you disposed of the vehicle and the end of the tax year. When a vehicle is sold in the same month that a new vehicle is purchased and both vehicles are filed with the same gross vehicle weight, the credit should zero out any tax liability.

Ready For A Simple 2290 Filing Process?

Paying the HVUT on a recently purchased used vehicle doesn’t have to be a hassle; with i2290, e-filing your Form 2290 is a breeze. We’ll ask you a few questions about your vehicle(s), you’ll input your payment information, and just like that, you’re ready to file. 

Once you submit your simple 2290, you’ll receive your stamped Schedule 1 in a matter of minutes. You can always access your tax documents online, and when it’s time to file again the next year, you can automatically import vehicles from the previous year. Plus, if you plan on purchasing used vehicles throughout the tax year, you don’t necessarily have to pay for each Form 2290 you file. With our unlimited plan, you can file as many times as you wish at no extra cost. 

So, are you ready for a simpler Form 2290 filing process? Create an account with i2290 today!

Special note: This article is for general purposes, and is not intended to provide, and should not be relied on for tax, legal, investment, or accounting advice. The best way to ensure you’re filing correctly and paying appropriate taxes is by following IRS regulations and consulting with a tax professional.