Purchasing a used heavy highway vehicle with a taxable gross weight of 55,000 pounds or more at any time during the current tax period (July 1 to June 30) creates a Form 2290 filing obligation for the new owner. The critical difference in filing compared to submitting for a full tax year, however, is the documentation from the seller and the need to file a prorated tax return.

Key Documents Provided by the Seller

The most important document that needs to be provided by the seller to the new owner is proof that the previous owner handled the HVUT for the current period.

• Seller's Stamped Schedule 1 Copy: The best documentation is a clear copy of the seller's IRS-stamped Schedule 1 (Form 2290). This document will be verifiable proof of payment for the time that the seller owned and operated the vehicle during the current tax period.
• Purpose: If the seller has paid the full annual tax, this document permits the new owner to confirm the vehicle's VIN and taxable gross weight and verify the previous payment to prevent the new owner from overpaying the tax.
• Bill of Sale: Although it is customary in any purchase, the bill of sale here will be important for establishing the date of sale/transfer. This date will be necessary in determining the new owner's prorated tax calculation and filing deadline.

New Owner's Filing Obligation and Deadline

Regardless of whether the seller paid the tax, the new owner is required to file Form 2290 when taking possession of the vehicle.

• Filing Requirement: A Form 2290 return must be filed under the buyer's Employer Identification Number (EIN). The new owner is responsible for the HVUT for the month of first use under their registration.
• Filing Deadline: The return must be filed on or before the last day of the month following the month in which the vehicle first began to be used on a public highway under the new owner's registration.
• Example: If the new owner drives the vehicle home from the dealership in November, the first used month, the filing deadline is December 31st.

Calculating the Pro-Rated Tax

If the seller did not pay for the entire year, the new owner must file and pay for a prorated amount of tax.

• Proration: This tax is calculated for only the remaining months in the tax period of July 1 to June 30, beginning with the first used month of the buyer.
• Tax Credit Consideration: Even if the seller did pay the full annual tax, the new owner still files, but the specific calculation ensures that the new owner only pays the remaining tax while the seller claims a tax credit or refund for the months past the sale. The IRS instruction specifically provides tables for such calculations depending on the vehicle's taxable gross weight and the month of sale.

It's highly advisable to utilize an e-file provider authorized by the IRS, as these automate the sometimes very complicated prorated tax calculation and immediately generate the new owner's stamped Schedule 1, which is required for vehicle registration.

Note: For more information, visit IRS website