For trucks and other taxable vehicles in use during July, payments are due on August 31. The tax is based on weight and normally ranges from $100 to $550 per vehicle. A variety of special rules, discussed in instructions for Form 2290, apply to vehicles with minimal road use, logging or agricultural vehicles, vehicles transferred during year and those first used on road after July.

State governments are required to receive proof of payment of federal highway use tax as a condition of vehicle registration. Schedule 1 of Form 2290 is stamped and returned to filers for this purpose. This process remains unchanged.

The Jobs Act also eliminated reduced tax rates for vehicles registered in Canada and Mexico. For vehicles with a base registration in either country, tax rate was 25% below regular rate.

In addition, Jobs Act made electronic filing mandatory for taxpayers who file highway use tax returns for 25 or more vehicles. The availability of electronic filing for Forms 2290 is pending. Taxpayers should continue to file paper returns. The IRS will notify taxpayers when electronic filing program is available.

This one-time deduction must be taken in year vehicle is originally used. The taxpayer must be original owner. Individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on Form 1040.

The amount of deduction for Toyota Highlander Hybrid was set after manufacturer, Toyota Motor Sales, U.S.A., Inc. documented for IRS incremental cost related to vehicle’s electric motor and related equipment.

A $2,000 tax deduction? I’m off to my local Toyota dealer!