Tax on the Oregon Trail
Ah, vacation time. You’ve packed the car and hit the road, but there’s this niggling feeling that you’ve forgotten something.
Is the stove on, or maybe the iron? Do you have your bathing suit?
It’s only after you get back from basking in the sun that you see the pink notice in the mail from Oregon DOT.
In the rush to file your IFTA return in April and plan your summer getaway, you forgot about that reminder from Oregon asking you why you filed a “nil” return when you actually had distance in January. Now your Oregon motor carrier account has been suspended.
What to do?
First of all, how the heck does Oregon know you had distance in their state in January? Well, I’ll tell you: Oregon Ports of Entry. There are six, and they keep track of when you enter and when you exit.
Oregon is an anomaly in the motor carrier tax world. Unlike other states that charge a mileage tax, Oregon does not collect fuel taxes on heavy trucks. They count on mileage taxes for a higher portion of their revenue, so you’d better report your distance correctly and on time because Oregon is dead serious about enforcing the rules.
The good news is, typically, Oregon people are pleasant to deal with. Here’s what you need to know:
Oregon requires motor carriers operating commercial vehicles on public roads within the state, and with a gross weight over 26,000 lbs., to report and pay weight-mile tax. Tax rates vary depending on how heavy the vehicle will operate at during the reporting period, so you’ll be asked to declare the vehicle’s lowest and highest weights when you apply for your Oregon operating authority. You’ll get a printed “Weight Receipt and Tax Identifier” with these tax-declared weights on it to keep inside the cab.
Most motor carriers report mileage tax on a monthly basis. If you report your taxes on a quarterly basis, the reporting period is each calendar quarter. Carriers without an established account must carry a temporary permit and pay tax up front at the time of issue.
Oregon requires all carriers to keep daily records of vehicles used during the current reporting period, and that they keep records for a minimum of three years.
Retention periods may be longer when the records are also used for registration (IRP) or fuel tax (IFTA) purposes.
Distance records from onboard recording devices or vehicle tracking systems can be used provided they meet all the necessary tax-filing requirements and can be printed upon request.
File no matter what
Motor carriers with established accounts must carry credentials and file reports even when there are no operations in Oregon and no tax is due. Failure to do so could result in suspension of the account and penalties equal to 10% of the late tax.
Oregon can also suspend your account when you file a tax report with zero mileage and zero tax paid but operations were observed. That’s the pink slip from the example at the start of the column.
With fuel efficiency improving and potentially putting fuel-tax revenues at risk, distance taxes are getting a lot of attention as a way to raise infrastructure funds.
There may come a time when vehicles use telematics to automatically record and transmit mileage to governments for you and governments can just charge your account.
Until then, just make sure you file your tax return. Those Oregon people are nice, but they want their money.
Sandy Johnson has been managing IFTA, IRP, and other fleet taxes for more than 25 years. She is the author of the book, 7 Things You Need to Know About Fleet Taxes, and operates northstarfleet.com, which provides vehicle tax and license compliance services for trucking operations. She can be reached at 1-877-860-8025 or firstname.lastname@example.org.
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