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Code of Virginia
Title 58.1. Taxation
Chapter 27. Road Tax on Motor Carriers
11/25/2020

Chapter 27. Road Tax on Motor Carriers.

§ 58.1-2700. Definitions.

Whenever used in this chapter, the term:

"Carrier" means a person who operates or causes to be operated a commercial highway vehicle on any highway in the Commonwealth.

"Department" means the Department of Motor Vehicles, acting through its officers and agents.

"Identification marker" means a decal issued by the Department to show that a vehicle operated by a carrier is properly registered with the Department for the payment of the road tax.

"IFTA" means the International Fuel Tax Agreement, as entered into by the Department, and as amended by the International Fuel Tax Association, Inc.

"Licensee" means a carrier who holds an uncancelled IFTA license issued by the Commonwealth.

"Motor carrier" means every person, firm or corporation who owns or operates or causes to be operated on any highway in this Commonwealth any qualified highway vehicle.

"Operations" means the physical activities of all such vehicles, whether loaded or empty, whether for compensation or not for compensation, and whether owned by or leased to the motor carrier who operates them or causes them to be operated.

"Qualified highway vehicle" means a highway vehicle used, designed, or maintained for transportation of persons or property that (i) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms, (ii) has three or more axles regardless of weight, or (iii) is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight. "Qualified highway vehicle" does not include recreational vehicles.

"Tractor truck" means every motor vehicle designed and used primarily for drawing other vehicles and not so constructed as to carry a load other than a part of the load and weight of the vehicle attached thereto.

"Truck" means every motor vehicle designed to transport property on its own structure independent of any other vehicle and having a registered gross weight in excess of 7,500 pounds.

Code 1950, § 58-627; 1954, c. 341; 1956, c. 475; 1970, c. 32; 1978, c. 62; 1980, c. 649; 1982, c. 671; 1984, c. 675; 1995, cc. 744, 803; 1996, c. 575; 1997, c. 283.

§ 58.1-2700.1. Interstate motor carrier road tax.

In accordance with the provisions of IFTA, as amended, all motor carriers that operate or cause to be operated one or more qualified highway vehicles in the Commonwealth and at least one other jurisdiction participating in IFTA shall apply to the Department for an IFTA license and identification markers. The Department shall issue a license and vehicle identification markers to each carrier that operates qualified highway vehicles in the Commonwealth and at least one other jurisdiction participating in IFTA so as to report its road tax liabilities. The Department may issue vehicle identification markers to carriers that operate qualified highway vehicles in the Commonwealth and at least one other jurisdiction not participating in IFTA. Each application shall contain the name and address of the carrier, and such other information as may be required by the Department.

The Department shall issue to the motor carrier identification markers for each vehicle in the carrier's fleet that will be operated within the Commonwealth.

The identification markers issued to the vehicles of the IFTA-licensed carriers shall expire on December 31 of each year. All other identification markers issued to carriers shall expire on June 30 of each year. The identification markers may be renewed prior to expiration provided (i) the carrier's privilege to operate vehicles in the Commonwealth has not been revoked or canceled, (ii) all required tax reports have been filed, and (iii) all road taxes, penalties, and interest due have been paid.

The cost of the identification markers issued to each vehicle in the carrier's fleet shall be $10 per vehicle.

The Department may, by letter, telegram, or other electronic means, authorize a vehicle to be operated without identification markers for not more than 10 days. Before sending such authorization, the Department shall collect from the carrier a fee of $20 for each vehicle so operated.

1995, cc. 744, 803; 1996, c. 575; 2002, c. 265; 2012, cc. 22, 111.

§ 58.1-2700.2. Motor carriers subject to terms of the International Fuel Tax Agreement; placement of identification markers.

All motor carriers that operate one or more qualified highway vehicles on an interstate basis are subject to and shall abide by all terms and conditions of IFTA that are applicable to motor carriers or operators of qualified highway vehicles. All carriers licensed by the Department pursuant to this chapter or IFTA shall place any required identification markers issued by the Department on each vehicle in the carrier's fleet in the place prescribed by the Department.

1995, cc. 744, 803; 2012, cc. 22, 111.

§ 58.1-2700.3. Waiver in emergency situations.

The Department shall have the authority to waive the requirements of this title for vehicles under emergency conditions.

1995, cc. 744, 803.

§ 58.1-2701. (Contingent expiration date — see Acts 2019, cc. 837 and 846) Amount of tax.

A. Except as provided in subsection C, every motor carrier shall pay a road tax per gallon equivalent to the cents per gallon credit for diesel fuel as determined under subsection A of § 58.1-2706 for the relevant period plus an additional amount per gallon, as determined by subsection B, calculated on the amount of motor fuel, diesel fuel or liquefied gases (which would not exist as liquids at a temperature of 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch absolute), used in its operations within the Commonwealth.

The tax imposed by this chapter shall be in addition to all other taxes of whatever character imposed on a motor carrier by any other provision of law.

B. The additional amount per gallon shall be determined by the Commissioner annually, effective July 1 of each year. On July 1, 2019, the additional amount per gallon shall be calculated by multiplying the average fuel economy by $0.01125. On July 1, 2020, and each July 1 thereafter, the additional amount per gallon shall be calculated by multiplying the average fuel economy by $0.0225. The additional amount per gallon shall be rounded to the nearest one-tenth of a cent. For purposes of this subsection, "average fuel economy" shall be calculated by dividing the total taxable miles driven in the Commonwealth by the total taxable gallons of fuel consumed in the Commonwealth, as reported in IFTA returns in the preceding taxable year.

C. In lieu of the tax imposed in subsection A, motor carriers registering qualified highway vehicles that are not registered under the International Registration Plan shall pay a fee of $150 per year for each qualified highway vehicle regardless of whether such vehicle will be included on the motor carrier's IFTA return. For the period of July 1, 2019, through June 30, 2020, the fee shall be adjusted based on the percent change in the road tax imposed pursuant to subsection A from June 30, 2019, to July 1, 2019. The Commissioner shall adjust the fee annually on July 1 of every year thereafter based on the percentage change in the road tax imposed pursuant to subsection A for the previous fiscal year as compared to the current fiscal year. The fee is due and payable when the vehicle registration fees are paid pursuant to the provisions of Article 7 (§ 46.2-685 et seq.) of Chapter 6 of Title 46.2.

If a vehicle becomes a qualified highway vehicle before the end of its registration period, the fee due at the time the vehicle becomes a qualified highway vehicle shall be prorated monthly to the registration expiration month. Fees paid under this subsection shall not be refunded unless a full refund of the registration fee paid is authorized by law.

D. All taxes and fees paid under the provisions of this chapter shall be deposited into the Commonwealth Transportation Fund established pursuant to § 33.2-1524.

Code 1950, §§ 58-628, 58-631, 58-637; 1956, c. 475; 1960, c. 603; 1964, c. 255; 1972, cc. 490, 862; 1973, c. 331; 1978, c. 673; 1979, c. 709; 1980, c. 227; 1982, c. 671; 1984, c. 675; 1986, c. 553; 1986, Sp. Sess., c. 15; 1996, c. 575; 1997, c. 423; 2000, cc. 729, 758; 2002, c. 265; 2007, c. 896; 2011, cc. 881, 889; 2013, c. 766; 2019, cc. 837, 846; 2020, cc. 1230, 1275.

§ 58.1-2701. (Contingent effective date — see Acts 2019, cc. 837 and 846) Amount of tax.

A. Except as provided in subsection B, every motor carrier shall pay a road tax per gallon equivalent to the cents per gallon credit for diesel fuel as determined under subsection A of § 58.1-2706 for the relevant period plus an additional $0.035 per gallon calculated on the amount of motor fuel, diesel fuel or liquefied gases (which would not exist as liquids at a temperature of 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch absolute), used in its operations within the Commonwealth

The tax imposed by this chapter shall be in addition to all other taxes of whatever character imposed on a motor carrier by any other provision of law.

B. In lieu of the tax imposed in subsection A, motor carriers registering qualified highway vehicles that are not registered under the International Registration Plan shall pay a fee of $150 per year for each qualified highway vehicle regardless of whether such vehicle will be included on the motor carrier's IFTA return. The fee is due and payable when the vehicle registration fees are paid pursuant to the provisions of Article 7 (§ 46.2-685 et seq.) of Chapter 6 of Title 46.2.

If a vehicle becomes a qualified highway vehicle before the end of its registration period, the fee due at the time the vehicle becomes a qualified highway vehicle shall be prorated monthly to the registration expiration month. Fees paid under this subsection shall not be refunded unless a full refund of the registration fee paid is authorized by law.

C. All taxes and fees paid under the provisions of this chapter shall be credited to the Highway Maintenance and Operating Fund established pursuant to § 33.2-1530, a special fund within the Commonwealth Transportation Fund.

Code 1950, §§ 58-628, 58-631, 58-637; 1956, c. 475; 1960, c. 603; 1964, c. 255; 1972, cc. 490, 862; 1973, c. 331; 1978, c. 673; 1979, c. 709; 1980, c. 227; 1982, c. 671; 1984, c. 675; 1986, c. 553; 1986, Sp. Sess., c. 15; 1996, c. 575; 1997, c. 423; 2000, cc. 729, 758; 2002, c. 265; 2007, c. 896; 2011, cc. 881, 889; 2013, c. 766.

§ 58.1-2702. Exemptions and exceptions.

The provisions of this chapter shall not apply to a person, firm or corporation owning or operating:

1. Recreational vehicles, as defined in the provisions of the International Fuel Tax Agreement (IFTA);

2. The first two Virginia-licensed trucks and tractor trucks, if used exclusively for farm use as defined in § 46.2-698 and if not licensed in any other state;

3. Qualified highway vehicles of a licensed highway vehicle dealer when operated without compensation for purposes incident to a sale or for demonstration; or

4. Any highway vehicle owned and operated by the United States, the District of Columbia, the Commonwealth of Virginia or any municipality or any other political subdivision of the Commonwealth, or any other state.

Code 1950, §§ 58-627, 58-633; 1954, c. 341; 1956, c. 475; 1970, c. 32; 1976, c. 440; 1978, c. 62; 1980, c. 649; 1982, c. 671; 1984, c. 675; 1988, cc. 514, 725; 1993, c. 40; 1995, cc. 744, 803; 1996, c. 575; 1997, c. 283; 2000, cc. 729, 758.

§ 58.1-2703. Payment of tax.

The tax imposed under § 58.1-2701 shall be paid by each motor carrier quarterly to the State Treasurer on or before the last day of April, July, October and January of each year and calculated upon the amount of gasoline or other motor fuel used in its operations within the Commonwealth by each such carrier during the quarter ending with the last day of the preceding month.

Code 1950, § 58-630; 1984, c. 675.

§ 58.1-2704. How amount of fuel used in the Commonwealth ascertained.

On and after October 1, 1992, the amount of gasoline or other motor fuel used in the operations of any motor carrier in the Commonwealth shall be determined by dividing the total number of miles traveled within the Commonwealth by such carrier's vehicles during a calendar quarter by a consumption factor, such factor being comprised of the total number of miles traveled by all vehicles of the motor carrier during the quarter divided by the total amount of gasoline or other motor fuel used in its entire operations during such quarter.

Code 1950, § 58-632; 1956, c. 475; 1984, c. 675; 1990, c. 216; 1992, c. 309.

§ 58.1-2705. Reports of carriers.

Every motor carrier subject to the tax imposed by this chapter or filing under the terms of the International Fuel Tax Agreement shall, on or before the last day of April, July, October and January of every year, make to the Department or proper agency pursuant to the International Fuel Tax Agreement such reports of its operations during the quarter ending the last day of the preceding month as the Department may require and such other reports from time to time as the Department may deem necessary.

Code 1950, § 58-633; 1976, c. 440; 1984, c. 675; 1995, cc. 744, 803.

§ 58.1-2706. Credit for payment of motor fuel, diesel fuel or liquefied gases tax.

A. Every motor carrier subject to the road tax shall be entitled to a credit on such tax on every gallon of motor fuel, diesel fuel and liquefied gases purchased by such carrier within the Commonwealth for use in its operations either within or without the Commonwealth and upon which the motor fuel, diesel fuel or liquefied gases tax imposed by the laws of the Commonwealth has been paid by such carrier. Evidence of the payment of such tax in such form as may be required by, or is satisfactory to, the Department shall be furnished by each carrier claiming the credit herein allowed. The credit for diesel fuel shall be at a cents per gallon rate equivalent to the tax imposed under subsection B of § 58.1-2217 for the relevant period as converted by the Commissioner to a cents per gallon tax for purposes of this credit. The credit for all other motor fuels and liquefied gases shall be at a cents per gallon rate equivalent to the tax imposed under subsection A of § 58.1-2217 for the relevant period as converted by the Commissioner to a cents per gallon tax for purposes of this credit.

B. When the amount of the credit to which any motor carrier is entitled for any quarter exceeds the amount of the tax for which such carrier is liable for the same quarter, the excess may: (i) be allowed as a credit on the tax for which such carrier would be otherwise liable for any of the eight succeeding quarters or (ii) be refunded, upon application, duly verified and presented and supported by such evidence as may be satisfactory to the Department.

C. The Department may allow a refund upon receipt of proper application and review. It shall be at the discretion of the Department to determine whether an audit is required.

D. The refund may be allowed without a formal hearing if the amount of refund is agreed to by the applicant. Otherwise, a formal hearing on the application shall be held by the Department after notice of not less than 10 days to the applicant and the Attorney General.

E. Whenever any refund is ordered it shall be paid out of the Highway Maintenance and Operating Fund established pursuant to § 33.2-1530.

F. Whenever a person operating under lease to a motor carrier to perform transport services on behalf of the carrier purchases motor fuel, diesel fuel or liquefied gases relating to such services, such payments or purchases may, at the discretion of the Department, be considered payment or purchases by the carrier.

Code 1950, § 58-629; 1952, c. 281; 1956, c. 475; 1960, c. 603; 1972, c. 490; 1980, c. 227; 1982, c. 671; 1984, c. 675; 1986, c. 553; 1986, Sp. Sess., c. 15; 1988, c. 381; 1990, c. 245; 1992, c. 309; 1995, cc. 744, 803; 1996, c. 575; 1999, c. 94; 2007, c. 896; 2013, c. 766.

§ 58.1-2707. Refunds to motor carriers who give bond.

A motor carrier not operating as an IFTA licensee may be required to give a surety company bond in the amount of not less than $2,000, as shall appear sufficient in the discretion of the Department, payable to the Commonwealth and conditioned that the carrier will pay all taxes due and to become due under this chapter from the date of the bond to the date when either the carrier or the bonding company notifies the Department that the bond has been canceled. The surety shall be a corporation authorized to write surety bonds in Virginia. So long as the bond remains in force the Department may order refunds to the motor carrier in the amounts appearing to be due on applications duly filed by the carrier under this chapter (§ 58.1-2700 et seq.) without first auditing the records of the carrier. The surety shall be liable for all omitted taxes assessed pursuant to § 58.1-2025 against the carrier, including the penalties and interest provided in such section, even though the assessment is made after cancellation of the bond, but only for taxes due and payable while the bond was in force and penalties and interest on the taxes.

Code 1950, § 58-629.1; 1952, c. 281; 1962, c. 586; 1984, c. 675; 1986, c. 339; 1992, c. 309; 1993, c. 101; 1995, cc. 744, 803.

§ 58.1-2708. Inspection of books and records.

The Department and its authorized agents and representatives shall have the right at any reasonable time to inspect the books and records of any motor carrier subject to the tax imposed by this chapter.

Code 1950, § 58-634; 1984, c. 675; 1995, cc. 744, 803.

§ 58.1-2709. Penalties.

The Department may, after a hearing had upon notice, duly served not less than ten days prior to the date set for such hearing, impose a penalty, which shall be in addition to any other penalty imposed by this chapter, not exceeding $2,500, upon any licensed motor carrier violating any provision of this chapter or the IFTA, or failing to comply with IFTA or any regulation of the Department promulgated pursuant to this chapter. Each such failure or violation shall constitute a separate offense. The penalty shall be collectible by the process of the Department as provided by law. Any person against whom an order or decision of the Commissioner has been adversely rendered relating to the tax imposed by this chapter may, within fifteen days of such order or decision, appeal from such an order or decision to the Circuit Court of the City of Richmond. In addition to imposing such penalty, or without imposing any penalty, the Department may suspend or revoke any certificate, permit or other evidence of right issued by the Department which the motor carrier holds.

Code 1950, §§ 58-635, 58-636; 1984, c. 675; 1993, c. 42; 1995, cc. 744, 803; 2002, c. 265.

§ 58.1-2710. Penalty for false statements.

Any person who willfully and knowingly makes a false statement orally, or in writing, or in the form of a receipt for the sale of motor fuel, for the purpose of obtaining or attempting to obtain or to assist any other person, partnership or corporation to obtain or attempt to obtain a credit or refund or reduction of liability for taxes under this chapter shall be guilty of a Class 1 misdemeanor.

Code 1950, § 58-629.2; 1952, c. 281; 1984, c. 675.

§ 58.1-2711. Assistance of Department of Taxation.

At the request of the Department, the Department of Taxation shall furnish the Department the amount of deduction from income taken by any person conducting business as a motor carrier as defined in § 58.1-2700 on account of the purchase of motor fuel, diesel fuel or liquefied gases.

Code 1950, § 58-634.1; 1956, c. 475; 1984, c. 675; 1990, c. 245; 1995, cc. 744, 803; 1996, c. 575.

§ 58.1-2712. Repealed.

Repealed by Acts 1995, cc. 744 and 803, effective January 1, 1996.

§ 58.1-2712.1. International Fuel Tax Agreement.

The Department may, with the approval of the Governor, enter into IFTA for interstate motor carriers and abide by the requirements set forth in IFTA. All motor carriers that operate one or more qualified highway vehicles on an interstate basis are subject to and shall abide by all terms and conditions of IFTA that are applicable to motor carriers or operators of qualified highway vehicles. All requirements of IFTA shall also apply to motor carriers operating in intrastate commerce unless specific requirements are determined by the Department to be not in the best interest of the motor carrier industry.

1995, cc. 744, 803; 2012, cc. 22, 111.

§ 58.1-2712.2. Exchange of information; penalties.

A. The Commissioner of the Department is authorized to enter into written agreements with (i) duly constituted tax officials and motor vehicle agencies of other states and countries or provinces of any country that are member jurisdictions of the International Fuel Tax Agreement and (ii) any entity formed by the member jurisdictions of the International Fuel Tax Agreement to administer and conduct the business of such Agreement, to permit the exchange of information in order to facilitate the collection of taxes under such Agreement.

B. Any person to whom tax information is divulged pursuant to this section shall be subject to the prohibitions and penalties prescribed in § 58.1-3.

2001, c. 84.