Truck Excise Tax Due Date and Penalties Explained
Truck Excise Tax is a very significant tax requirement of the federal government for business enterprises that deal with the sale of heavy trucks, trailers, and tractors. Failing to file on time and not paying the necessary taxes can result in penalties and interests charged by the IRS.
By knowing when the tax is to be paid, the payment deadlines for every quarter, and the penalties in case of nonpayment, businesses will be able to save themselves from additional expenses. This guide aims to inform you about the Truck Excise Tax deadlines and penalties.
When Federal Truck Excise Taxes are Due?
Since Truck Retail Excise Tax is reported using Form 720 with IRS Tax No. 33, businesses must follow the quarterly Form 720 filing deadlines established by the IRS.
The tax liability arising during each calendar quarter must be reported by the applicable deadline.
Form 720 Quarterly Filing Due Dates for Truck Excise Tax
Important: If a filing deadline falls on a Saturday, Sunday, or legal holiday, the IRS generally allows businesses to file Form 720 on the next business day.
What Are the Truck Excise Tax Penalties?
If the company fails to submit the Form 720 or make the required payments for the Truck Retail Excise Tax, then the company will be penalized by the IRS.
There could be additional taxes based on modifications to the vehicle after the service; however, any fraudulent or tax evasion activities could attract more severe penalties.
1. Form 720 Late Filing and Late Payment Penalties
The IRS can levy distinct penalties in case companies are late with their quarterly Form 720 filing and payment of Truck Excise Tax.
Important points to remember:
When both late filing and late payment penalties apply during the same month, the late filing penalty is generally reduced by the applicable late payment penalty.
Interest may accrue on unpaid taxes under IRC Sections 6601 and IRC Section 6621
Check the IRS Penalty page for more details.
2. The Six-Month Post-Service Installation Rule and Secondary Liability
An additional 12% excise tax may apply when qualifying parts or accessories are installed on a taxable heavy vehicle within six months after the vehicle is first placed in service.
The vehicle's owner, lessee, or operator is liable for the tax, while the business performing the installation is secondarily liable. The rule excludes replacement parts and accessories and generally does not apply when the aggregate cost of qualifying parts, accessories, and installation is $1,000 or less during the six-month period.
Six-Month Installation Tax Rules
Refer to Part or accessories Part under Retail Tax on Heavy Trucks, Trailers, and Tractors section in IRS 510 Publication for more details
3. Civil Fraud and Tax Evasion Penalties
Intentional failure to report sales subject to tax, the concealment of taxable transactions, or supplying false information in order to minimize the Truck Excise Tax liability is subject to civil fraud penalties.
Civil Fraud Penalty Rate
What Is Federal Truck Excise Tax and When Does It Apply?
Truck Excise Tax (also called Federal Heavy Truck Retail Excise Tax) is a federal excise tax of 12% that is applied to the initial retail sales of specific types of heavy trucks, truck trailers, semitrailers, and tractors.
The tax under IRC Section 4051(a) is usually applicable on the first retail sale of qualifying automobiles and certain components and accessories that accompany them. The liability to pay the tax falls on the seller of such goods.
As per the IRS, 12% Truck Retail Excise Tax is usually applicable to:
Heavy Trucks: Truck chassis and truck body parts that can be used with vehicles having a GVW of more than 33,000 pounds.
Trailers and Semitrailers: Trailer and semitrailer chassis and bodies suitable for use with vehicles having a GVW of more than 26,000 pounds.
Highway Tractors: Tractors chiefly used for highway transportation with trailers or semitrailers, unless they satisfy both exclusions: a GVW of 19,500 pounds or less and a gross combined weight of 33,000 pounds or less.
The tax may also apply when a taxable vehicle is used before its first retail sale or when qualifying parts and accessories are installed within six months after the vehicle is first placed in service.
Read our blog on fet tax on trucks and trailers for a clearer understanding.
Conclusion
Understanding Truck Excise Tax filing deadlines and applicable penalties is essential to staying compliant with IRS regulations and avoiding unnecessary fines. One is supposed to be ready to file Form 720 and report correctly on the taxable heavy truck sales in order to ensure that he/she avoids unnecessary penalties.
Simple720 is an IRS-Authorized online 720 filing portal which can help business people to prepare and file Form 720.
File your Truck Excise Tax Online with Simple720 today!
