What Texas Form 01-142 (2019) Is For
Texas Form 01-142 is required for the reporting and payment of the Heavy-Duty Diesel Equipment Surcharge imposed under the Texas Emissions Reduction Plan. This surcharge applies to specific diesel-powered off-highway vehicles used in commercial and industrial operations across the state of Texas.
Revenue collected through this surcharge supports air quality programs authorized by the state legislature and administered by the Texas Comptroller. The surcharge is separate from Texas Sales and Use Tax and must always be reported on its own dedicated return.
When You’d Use Texas Form 01-142
Texas Form 01-142 is used by sellers, lessors, or renters to collect the Heavy-Duty Diesel Equipment Surcharge on taxable off-highway equipment under the Texas Emissions Reduction Plan. It also applies when a buyer has to report the extra charge themselves because it wasn't collected at the time of sale.
This return is filed separately from Texas Sales and Use Tax and supports ongoing tax compliance with the Texas Comptroller. It is commonly used for each filing period in which qualifying transactions occur, including corrections made through an amended return or refund claim.
Key Rules or Details for 2019
For 2019, the surcharge rate is 1.5 percent of the total consideration charged for qualifying off-highway equipment powered by diesel fuel, including delivery and installation when billed as part of the sale. The surcharge does not apply to highway motor vehicles and differs from the state fuel tax under the International Fuel Tax Agreement.
Texas Sales and Use Tax rules state that certain transactions, such as those involving manufacturing, agriculture, or timber, may be exempt from tax if the proper documentation is provided. Typically, equipment that operates on compressed natural gas or liquefied natural gas is exempt from this surcharge program. Records should be kept for the length of the statute of limitations.
Step-by-Step (High Level)
Step 1: Gather qualifying transaction records
Collect sales and lease records for all qualifying off-highway equipment sold, leased, or rented during the filing period.
Step 2: Separate taxable vs. exempt transactions
Exclude exempt sales only when supported by valid exemption documentation. Keep the exemption support with the period records.
Step 3: Calculate taxable receipts and the surcharge
Total taxable receipts and apply the correct surcharge rate to calculate the surcharge due for the period.
Step 4: Complete Form 01-142
Enter business information, taxable totals, any credits, and the net surcharge due. Review entries to confirm totals match supporting records.
Step 5: File, pay, and retain confirmation
Use Webfile, TEXNET, or another Comptroller-approved method to send in the return and payment. While smaller businesses may use Webfile or other approved options, companies that paid $500,000 or more in Texas taxes in the previous state fiscal year are required to remit their taxes through TEXNET.
Common Mistakes and How to Avoid Them
- Misidentifying surchargeable transactions: Confirm the surcharge applies only to qualifying off-highway equipment transactions and review the item description before billing.
- Charging the surcharge on highway vehicles: Exclude highway motor vehicles and limit the surcharge to off-highway equipment to prevent improper collection and refund issues.
- Leaving out delivery or installation charges: Include delivery and installation in the surcharge base when they are part of the same bundled transaction.
- Reporting the surcharge with sales tax: File and remit the surcharge on the correct return (Form 01-142) instead of combining it with sales tax reporting.
- Missing deadlines or filing with weak exemption support: File on time, even when no surcharge is due, and retain complete exemption documentation to avoid assessments during audits.
What Happens After You File
The Texas Comptroller processes the return and puts the payment into the taxpayer's liability account after it has been filed. Returns that are filed electronically typically appear in the system more quickly than those sent on paper.
If there are any problems, the Comptroller may request additional information, such as vehicle identification number records or distribution logs. If there is no response, fines or other penalties may be imposed.
The Statute of Limitations states that the Comptroller typically has four years to review filed returns. Periods with unfiled or fraudulent returns may remain open for an extended period.
FAQs
Who must file Texas Form 01-142?
Any business or individual that sells, leases, rents, or self-reports qualifying off-highway diesel equipment in Texas must file Form 01-142 for each applicable filing period.
Is the diesel equipment surcharge the same as the state fuel tax?
No, the surcharge is separate from the state fuel tax and the International Fuel Tax Agreement, and it applies to equipment transactions rather than fuel usage.
Can an amended return be filed after the due date?
Yes, amended returns may be filed to correct errors; however, amended filings that reduce the tax due generally must be submitted on paper.
Does the surcharge apply to parts sold separately?
No, parts and accessories sold separately are not subject to the surcharge unless included as part of the original equipment sale or lease.
What penalties apply for late filing?
A $50 late filing fee applies immediately after the due date, and unpaid amounts may also incur additional fees and interest.
Can overpaid surcharge amounts be recovered?
Yes, taxpayers can file a refund claim or apply a credit to a future return as long as they have the proper paperwork.
Where can taxpayers get help with Form 01-142?
Taxpayers can contact the Texas Comptroller directly or refer to the official information published by the Comptroller's business tax resource.
