Skip to Content

Can a Trucking Company Be Tax Exempt?

Can a Trucking Company Be Tax Exempt?

Typically, every established and growing trucking company can be tax-exempt by having qualifying vehicles like trucks.

All those trucking businesses can get such tax exemptions that are non-profit organizations. Also, they should transport bulk material with third-party clients. 

Can a Trucking Company Be Tax Exempt? A trucking company can be tax exempt by filing for this procedure under the guidelines of the IRS, getting documented proof, and preventing money losses in the form of taxes. However, the trucks, trailers, protection chains, and lifting material can be tax-exempt, but packaging material and personal hauling vehicles exclude the policy. Also, a trucking company can save up to $10000 to $11000 annually by tax exemption.

Furthermore, in 2020, around 1.76 million companies registered for federal tax exemption under the IRS across the USA. 

In addition, the trucking company cannot take profits from the business because it violates the standard federal laws of different states. Also, the policy only restricts the federal taxes, but the businessman has to pay the local and state taxes according to the infrastructure of the company. 

Companies without these exemption policies undergo higher money loss in the form of taxes, and they pay for the employee’s social security and medication taxes. Also, the average of this tax is around 16% to 17% of the total business profit.

In addition, the medication taxes revolve around 2% to 3% of the total business profits annually. Also, the taxes percentage of federal and local taxes depends on the overall return policies. 

How to make your trucking company tax exempt?

Typically, a small to medium business spends a lot of money on taxes. But, the tax exempted companies do not pay these amounts. So, to achieve such parameters, the company should file for tax exemption. 

Narrate the business details

Access the relevant state department and provide documentation about the business details, number of shipment vehicles, and other such things. Also, the owner should provide data and the total sales.

File for the tax exemption

Fill a form for the exemption of taxes under the IRS rules. It helps in the federal tax exemption and saves business profits. 

Use the internal revenue code for such procedures and secure the business. 

The International Revenue Service is responsible for the tax exemption of companies, employees, and fleets. As a result, the company gets a permit to perform all the functions without any problem. 

Qualify the fleet as Transportation Company

Generally, the fleets include trucks, trailers, and semi-trucks for the hauling, movement, and shipment of goods and non-toxic material. 

But, qualified transportation companies can get tax exemption by registering their fleets. Also, it helps in the overall growth of a massive business.

In those situations, the company owner should purchase more vehicles when he does not have sufficient. 

High-quality procedures and improvements

The standard trucking companies ships the heavy loads from one spot to another with different size vehicles. 

In such conditions, improve company’s standard work procedures and strategies. Then, file for tax exemption with appropriate standards.

In addition, keep your vehicles under the rules and regulations of every state. In this way, the company remains firm by hauling the goods.

In addition, provide trucks for hiring procedures and personal usage. Also, avoid the private utilization of trucks and hauling vehicles. 

Therefore, it is essential to protect your trucking business from several crises. 

What are tax laws and different tax criteria for trucking companies?

Typically, a few laws regulate the overall tax policies for trucking companies. In addition, I have described the rules, state laws, and exempted vehicles according to different states. 

However, the tax limits vary from one state to another, but a few policies remain similar in all areas. 

In addition, several states permit the exemption of taxes on trucks, vehicles, leases, and maintenance procedures. But, private fleets are essential for transporting goods and bulk materials.

Also, this saves the company costs and positively impacts overall profit. In those situations, while the maximum advantage of tax exemption is desirable, convert your fleet business into a transportation company. 

However, the rules vary according to the state government laws and transportation mechanisms. But, the Wisconsin tax code defines exempt purchases. Also, a few of them are as follow, 

Several vehicles like trucks, tractors, motor trucks, and semi-trucks include in these transporting vehicles that work on the highways.

The tractors and motor trucks work as carriers and contract a company buys them for hauling and shipment activities. They can get tax exemption under section 77.54(5) (b), followed by the Wisconsin code. 

In addition, the Ohio Sales tax is a name for another taxing policy. However, it provides sales tax exemption for all those that have a business on the highway.

Also, the purchase of trucks, tractors, and semi-trailers is tax-free for these companies. In addition, the law works under R.C. 5739.02(B) (32).

Moreover, the law states that the sale, maintenance, repairs, and purchase of motor vehicles are tax-exempt according to the shipment activities of the trucking business.

In addition, the packaging material purchase and movement from one coast to another are free from state tax policies Across the USA.

In addition, while filing documents, the owner has to narrate all the business technicalities, availability of fleets, trucks, and transporting vehicles. Also, the authorities suggest keeping the tax-exempt document as a business runner.

In addition, it saves the owner from the sudden investigation, and he secures the money loss by showing the authentic certificate. 

There is a specific limit for different vehicles for having tax-exempt policies. A few of these policies are as follow, 

Each vehicle must get a license, and it qualifies for an exemption of tax. Also, the companies cannot purchase or add automobiles to their fleets without following exemption policies. 

In addition, use the included vehicles for hauling of safe, non-toxic, and non-hazardous material. Also, use vehicles for appropriate shipments while involving the second and third parties. 

Also, turn your small business into a transportation company with a fleet of several vehicles, policies, and customer services.

In this way, the business can get tax exemption soon without any problems. Also, you can get exemption on the trucks, trailers, tractors, maintenance, and repair procedures.

These companies have a check on all the activities of your business. Therefore, use the vehicles only for transportation and customer benefits. 

Furthermore, this policy is part of trucks, semi-truck, trailers, buses, and semi-trailer purchases.

Maintenance and repairing of hauling vehicles

Uplifting truck accessories with lifting chains, ropes, and security items are free from taxes. 

In addition, the packaging material of the moving companies does not qualify for the tax exemption.

The off-highway vehicles are self-propelled, and they have no tax-free policies. In addition, forklifts have no tax exemptions. 

The truck maintenance tools do not get tax exemption while they are in bulk or minute ranges.

The battery chargers, miscellaneous repairing equipment, and welding flashes have no tax relief. 

How much a trucking company saves by tax-exempt?

Typically, a trucking company can save a lot of money due to the elevation of business policies and transporting vehicles. Also, the saving depends on the sale tax rates of the state. 

In addition, the annual lease of the company determines the total tax saving and exemption policies. For example, a well-established trucking organization has a qualified lease of around $121000 to $123000.

Then, the company sustain around $21000 to $22000 maintenance and repairing annually. In addition, the tax saving is $9000 to $1000 with a percentage of 6.2% to 6.4% every year. 

Related Articles:

Benefits of self-insured trucking company

Benefits of LLC trucking company

List of good trucking companies in Billings, MT

Famous Tennessee trucking companies

What Does a Trucking Company Dispatcher Do?

Top Trucking Companies in Virginia