What Texas Form 01-142 Is For
For qualifying off-road, heavy-duty diesel-powered equipment used in Texas, the diesel equipment surcharge must be reported and paid using Texas Form 01-142. The Texas Emissions Reduction Plan, which finances statewide programs targeted at enhancing air quality, is supported by this surcharge.
The surcharge applies to sales, leases, and rentals of diesel-powered equipment rated at 50 horsepower or more. It is imposed in addition to the Texas sales and use tax and must be reported separately using this form.
Businesses that sell or lease qualifying equipment generally collect the surcharge from customers and remit it to the Texas Comptroller. Purchasers may also be required to file the form when the surcharge was not collected at the time of purchase.
When You’d Use Texas Form 01-142
Texas Form 01-142 is used when a business sells, leases, or rents qualifying off-road, heavy-duty diesel equipment in Texas and is required to report the diesel equipment surcharge to the Texas Comptroller. It is also used when a purchaser buys taxable equipment and the seller does not collect the surcharge.
The form applies to both current and past-due filing periods, including situations that require an amended return to correct reporting errors. Returns are generally filed monthly or quarterly, with the due date typically being the 20th day after the end of the reporting period.
Key Rules or Details for 2011
For 2011, the heavy-duty diesel equipment surcharge rate was 2 percent of the taxable sales price, lease payment, or rental charge, and it applied to qualifying off-road diesel-powered equipment rated at 50 horsepower or more. The surcharge is not the same as the Texas sales and use tax. However, exemptions that eliminate sales tax usually also eliminate the surcharge.
Some exemptions may apply, such as those for farming and logging, provided the paperwork is valid and properly maintained. Lease agreements follow the timing rule because the surcharge rate is based on the original lease date, unless the lease is renewed or extended.
Step-by-Step (High Level)
Step 1: Gather transaction records
Keep track of all sales, leases, and rentals of diesel equipment that meet the requirements for the time period. Use invoices and exemption certificates to distinguish between taxable and non-taxable transactions.
Step 2: Verify taxpayer information and filing period
Use the same business name and taxpayer number that the Texas Comptroller has on file to fill out the taxpayer section of Form 01-142. Check the reporting time period and frequency for filing.
Step 3: Report taxable amounts by surcharge rate
Put taxable transactions in the section that has the correct surcharge rate. For activities in 2011, the 2 percent rate is usually used to report taxable amounts.
Step 4: Calculate the surcharge and apply adjustments
Multiply taxable amounts by the applicable rate and total the surcharge due. Apply any allowable deductions, credits, or timely filing discounts when eligible.
Step 5: File the return and submit payment
Use Webfile or an authorized paper filing method to turn in the completed return and payment by the due date. For compliance purposes, retain the supporting documentation and confirmation.
Common Mistakes and How to Avoid Them
- Using the wrong surcharge rate: Apply the correct 2011 surcharge rate of 2 percent and avoid using later reduced rates that can trigger underpayment and penalties.
- Charging the surcharge on exempt equipment: Confirm that agricultural or timber exemptions apply, obtain valid documentation, and retain it to ensure exempt transactions are not assessed.
- Filing late when no surcharge is due: Submit the required return for every period, even with no taxable transactions, to avoid automatic late-filing penalties.
- E-filing amended returns after the deadline: Submit amended returns that reduce tax due on paper after the original filing deadline, since late amendments are not accepted electronically.
- Not collecting the surcharge from customers: Charge the surcharge at the point of sale and reconcile invoices regularly, since the seller remains liable for remitting the surcharge even when it was not collected.
What Happens After You File
The Texas Comptroller checks the return for accuracy and completeness after it is submitted. Electronic filings provide instant confirmation of receipt and are processed more efficiently. The Comptroller may give a refund or credit the amount toward a subsequent return if the return reveals an overpayment. Processing a refund usually takes a few weeks.
Notices assessing penalties and interest are sent in response to underpayments or late filings. 61 days after the due date, interest starts to accrue on unpaid surcharge amounts. The taxpayer's permanent account record includes filed returns. These documents are used to support upcoming audits and investigations, ascertain filing frequency, and confirm compliance.
FAQs
Who must file Texas Form 01-142?
Any business or individual involved in taxable sales, leases, or rentals of qualifying off-road diesel equipment must file this form. Purchasers must file when the seller did not collect the surcharge.
Is the diesel equipment surcharge separate from sales tax?
Yes, the surcharge is imposed in addition to the Texas sales and use tax and must be reported on a separate return using Form 01-142.
What surcharge rate was applied in 2011?
The surcharge rate for 2011 was 2 percent of the taxable sales price, lease payment, or rental charge.
Can Texas Form 01-142 be filed electronically?
Yes, eligible taxpayers may file electronically using the Texas Comptroller’s Webfile system.
Are repair parts subject to the surcharge?
No, replacement parts and accessories sold separately from qualifying equipment are exempt from the diesel equipment surcharge.
How long should records be kept?
The Texas Comptroller recommends keeping records for at least four years to support filed returns, exemption claims, and audit inquiries.
