What Texas Form 01-142 Is For
The Heavy-Duty Diesel Equipment Surcharge levied under the Texas Emissions Reduction Plan must be reported and paid using Texas Form 01-142. Qualifying off-road diesel-powered vehicles that are sold, leased, or rented in the state of Texas are subject to the surcharge.
The Texas Comptroller oversees the administration of this surcharge, which is distinct from the state's sales and use tax. The money raised goes toward programs that reduce emissions from diesel fuel engines used in industrial, agricultural, forestry, and construction settings.
When You’d Use Texas Form 01-142
A taxpayer uses Texas Form 01-142 when selling, leasing, or renting off-road diesel equipment rated at 50 horsepower or more. The requirement applies to both new and used equipment unless the transaction qualifies as tax-exempt.
The form is also used to file late returns, submit amended returns, or request a refund claim for surcharge amounts collected in error. Similar to a used taxable vehicle, buyers must file directly if a seller does not collect the surcharge.
Key Rules or Details for 2021
Without considering any credits or deductions, the surcharge rate for 2021 was 1.5% of the total taxable amount. Trade-ins do not reduce the base for the surcharge, offsets to liability accounts, or modifications to GL accounts.
The extra fee only applies to gear specifically designed for off-road use. Excluded are highway motor vehicles, qualified motor vehicles that must fill out Form 2290 based on their taxable gross weight, and equipment that runs on compressed natural gas or liquefied natural gas.
There are some exceptions, such as for using the equipment for farming, handling farm products, and using timber equipment. Equipment used exclusively at oil and gas well sites is also exempt, provided the appropriate documentation is kept up to date.
Step-by-Step (High Level)
Step 1: Gather Transaction Records
During the reporting period, the filer should compile the invoices, service ticket records, and sales by part number reports for all qualifying diesel equipment transactions.
Step 2: Calculate the Surcharge
The total taxable receipts are multiplied by 1.5 percent to determine the surcharge. Until refunds have been given or the customer has given written consent, credits cannot be claimed.
Step 3: Complete Form 01-142
The filer includes liability amounts, surcharge calculations, and gross receipts on the form—an accurate invoice format and part and facility tracking support the reported figures.
Step 4: Submit the Return and Payment
Returns are filed using Webfile's surcharges tab. Payment can be made via TEXNET, direct deposit, or other approved electronic methods.
Common Mistakes and How to Avoid Them
- Treating the surcharge as sales tax: Report and remit it as a separate TERP surcharge obligation using the correct return, rather than combining it with Texas Sales and Use Tax.
- Claiming exemptions without documentation: Obtain and retain proper support, including agricultural certificates or a valid suspension statement, before treating a transaction as exempt.
- Taking credits before refunding customers: Refund the customer first or obtain written consent before claiming credits, since refund claim adjustments can be invalid without proof.
- Misclassifying off-road vs. highway vehicles: Confirm whether equipment is intended for off-road use or qualifies as a highway motor vehicle before applying surcharge rules.
- Not updating filing frequency when collections rise: Monitor collections and adjust filing frequency as needed to prevent penalties and interest from accruing due to missed or mismatched filing periods.
What Happens After You File
After filing, the return is processed by the Texas Comptroller, who also applies the payments to the taxpayer's Master Files Maintenance records. The majority of correctly completed returns are handled without further communication.
The Comptroller may send notices requesting payment or clarification if discrepancies are identified. Penalties, interest, and the statute of limitations for assessments and reimbursements apply to unpaid balances.
FAQs
Who must file Texas Form 01-142?
When the surcharge is applicable and improperly collected, any seller, lessor, or buyer of qualifying off-road diesel equipment used in Texas is required to file a report.
Can the surcharge be refunded?
Yes, a refund claim may be filed after refunding the surcharge to the customer or obtaining written consent. Claims must be submitted within statutory time limits.
Does the mileage use limit affect this surcharge?
No, mileage use limits apply to highway motor vehicles and do not affect liability for the off-road diesel equipment surcharge.
Are Texas Education Freedom Accounts or Education Savings Accounts related?
No, those programs are administered separately and are unrelated to the Heavy-Duty Diesel Equipment Surcharge.
Where can taxpayers get help with disputes or hardship issues?
Taxpayers may seek procedural assistance from the Taxpayer Advocate Service or Low-Income Taxpayer Clinics, although these resources do not provide legal representation.
Were there recent developments affecting the 2021 form?
There were no significant rate changes in 2021. Taxpayers should still review recent developments issued by the Texas Comptroller.
Does Publication 947 apply to this surcharge?
No, Publication 947 talks about federal depreciation rules, not state rules for reporting surcharges. However, some general record-keeping practices may be the same.
