More states charging taxes beyond IFTA
Several U.S. jurisdictions already assess a weight-mile tax or highway use tax on motor vehicles. These taxes are based on the miles a vehicle operates in their jurisdiction and are in addition to fuel use taxes.
With the increase in electric and hybrid vehicles, more states are looking into ways to make up for the decrease in fuel tax revenue. Carriers need to keep up with changes, since these state taxes are in addition to – and separate from – fuel taxes under the International Fuel Tax Agreement (IFTA).
Connecticut highway use tax
In Connecticut, the new highway use tax (HUT) began in January of this year (2023). It applies to eligible motor vehicles weighing 26,000 pounds or more. The HUT accrues based on a vehicle’s weight and the number of miles driven in the state. Per-mile tax rates increase based on vehicle gross weight, ranging from 2.5 to 17.5 cents per mile.
Carriers must obtain HUT permits, and then file returns and remit the tax monthly to the Department of Revenue Services.
Kentucky weight-distance tax
The Kentucky weight-distance tax is known as the KYU number. This program applies to all vehicles 60,000 lbs. or more.
Carriers subject to the tax must obtain a KYU license and provide a list of vehicles subject to the weight-distance tax. Quarterly reports must be filed on or before the last day of the month following the close of the quarter (even if no tax is due).
The KYU reports are separate from the IFTA returns.
New Mexico weight-distance tax
The New Mexico weight-distance tax applies to all vehicles 26,001 lbs. or more. All carriers operating on New Mexico highways must register and report and pay weight-distance tax quarterly or pay the trip tax each time they enter or exit the state.
An IFTA license and decals do not replace the state weight-distance credential.
New York highway use tax
New York’s highway use tax (HUT) applies to motor carriers operating any of the following on the public highways in New York:
- Automobile, truck, tractor, or other self-propelled device, alone or in combination with any trailer, semi-trailer, or dolly, with a gross weight more than 18,000 pounds; or
- Truck with an unloaded weight more than 8,000 pounds; or
- Tractor with an unloaded weight more than 4,000 pounds.
The HUT is based on the gross or unloaded weight of the motor vehicle and the number of miles the vehicle traveled on all state public highways.
All carriers subject to the tax must display an HUT decal on vehicles subject to the tax and file the highway use tax return, on a monthly, quarterly, or annual basis depending on the amount of the preceding calendar year’s tax liability.
Oregon weight-mileage tax
Oregon’s mileage tax applies to all carriers, private and for-hire, operating both intrastate and interstate, with vehicles having a combined weight over 26,000 pounds. The weight-mile tax is based on the carrier’s declared weight of the vehicle and the distance in which the vehicle travels in Oregon.
Carriers must file and pay the Oregon weight-mile tax on a monthly basis.
Key to remember: Several states charge highway use or weight-distance taxes, and more states are joining that list. Carriers must remember to obtain credentials and pay these taxes, in addition to their fuel taxes under IFTA.