If your operations involve renting or leasing commercial vehicles subject to heavy vehicle use tax (HVUT), make sure you know your role — or risk the fines, penalties, and interest that can result from late payments.

In these situations, certain conditions apply to different circumstances. This is why the details of the arrangement must be clearly spelled out in the written lease agreement.

The name on the vehicle registration is the name of the responsible party

The HVUT applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more and includes trucks, tractors, and buses. You may be an individual, corporation, partnership, or any other type of organization (including nonprofit charitable, educational, etc.).

Here’s the key: You must file Form 2290 and Schedule 1 if a taxable highway motor vehicle is registered or required to be registered in your name under any state or District of Columbia, Canadian, or Mexican law at the time of its first use.

Since the responsibility for vehicle registration is negotiable under a lease, it’s critical that this detail is clearly indicated in the written agreement. It not only indicates who is responsible for vehicle registration, but also who must pay the HVUT. Both responsibilities must be clearly stated in the written agreement.

Normally, in short-term rental situations (30 days or less), the rental company retains the responsibility for vehicle registration.

In longer-term leasing situations, the responsibility usually falls to the entity leasing the truck (lessee).

Even if the lessee is responsible for paying the tax, the vehicle owner should ensure the filing and payment are completed on time to avoid missed deadlines and potential penalties.

A twist: Dual registration

If the vehicle has dual registration in both the name of the owner and another person, the owner is deemed responsible for filing the tax under the HVUT rule (26 CFR 41.4481-3). This rule also applies to dual registration of a leased vehicle.

That said, in any case in which more than one person is liable for the tax for a taxable period, the liability of all persons is satisfied to the extent that the tax is paid by any person liable for the tax.

When to file

For vehicles you first use on a public highway in July: Include them in the Form 2290 that you file between July 1 and August 31 (your annual filing).

For vehicles first used during other months, file Form 2290 by the last day of the month following the month in which you first used the vehicle on a public highway. The tax will be prorated for these vehicles.