What Texas Form 01-142 (2023) Is For
Texas Form 01-142 is needed to report and pay the Heavy-Duty Diesel Equipment Surcharge that is part of the Texas Emissions Reduction Plan. The extra charge only applies to specific off-road diesel equipment that is sold, rented, or leased in Texas.
The Texas Comptroller oversees the state legislature's approved emissions reduction programs, which are funded by the surcharge. Both taxes must be reported separately and may apply to the same transaction even though they are distinct from the Texas Sales and Use Tax.
When You’d Use Texas Form 01-142
When a seller, lessor, or renter collects the surcharge on eligible off-road diesel equipment, Texas Form 01-142 must be submitted. If a seller is unable to collect the surcharge, buyers might also have to file directly.
Depending on the amount of surcharge collected during the reporting period, returns are either filed monthly or quarterly. For smaller amounts, quarterly filing is acceptable; however, when monthly collections surpass $1,500, monthly filing is necessary.
Late filing occurs when a payment or return is submitted after the due date. When the surcharge is applied to tax-exempt machinery used in agriculture or forestry, for example, the error on the amended return is fixed.
Key Rules or Details for 2023
The extra charge only applies to diesel equipment used off-road, not to vehicles that operate on highways. Fuel that the International Fuel Tax Agreement covers is not included, and dyed diesel fuel is subject to different tax rules.
Depending on how they are used, projects that involve building a desalination facility, desalinating seawater from the ocean, or drilling a groundwater well may be eligible for funding. In some cases, you may need to get a Cementing Certificate or an Operational Evaluation to prove your skills.
The surcharge rate for 2023 is still 1.5 percent. A small discount is given for filing on time. This should be recorded correctly in the taxpayer's accounting system using a liability account or GL account.
Step-by-Step (High Level)
Step 1: Gather qualifying transactions and exemption support
For the reporting period, gather all sales, leases, and rentals of diesel equipment that meet the requirements. Identify transactions that are exempt and maintain accurate records to support each exemption.
Step 2: Validate internal records and surcharge classifications
Verify the accuracy of the sales by part number and invoice format. Verify that the surcharges tab displays the correct surcharge categories and that the records for master files, parts, and facilities are accurate.
Step 3: Determine taxable receipts
To figure out the net taxable amount that is subject to the surcharge, add up all of your gross receipts and subtract any deductions that are allowed. Verify that the totals match the records they originated from.
Step 4: Calculate the surcharge and process payments or refunds
Use the correct surcharge rate for the time period in question to figure out how much the surcharge is. When possible, use approved electronic methods, such as direct deposit, to send out payments and any approved refunds.
Step 5: File and retain documentation
Keep the confirmation and submit the return using the authorized method. To allow for a review within the statute of limitations, retain the filed return and any supporting documentation for a minimum of four years.
Common Mistakes and How to Avoid Them
- Charging surcharge on exempt agricultural products: Obtain and retain valid exemption certificates before treating a sale as exempt, so the surcharge is not misapplied.
- Using the wrong surcharge rate: Base the rate on the sale or lease contract execution date, not payment timing, to ensure the correct rate is applied.
- Combining surcharge with sales tax: Track the surcharge separately from Texas Sales and Use Tax using distinct accounting entries and reporting lines.
- Filing late without accurate penalties and interest: Calculate and include all required penalties and interest with late filings to prevent follow-up notices.
- Requesting a refund before paying the customer: Refund or credit the customer first, then submit the refund claim with proper documentation to support the request.
What Happens After You File
After the return is submitted, the Texas Comptroller processes it and credits the taxpayer's account. Generally speaking, electronic filings are verified faster than paper ones.
Returns can be examined for completeness and accuracy. The Comptroller may ask for more information or supporting documentation if there are any inconsistencies.
Audits can happen during the Statute of Limitations. Keeping service tickets and account management records organized makes it easier to finish audits quickly.
FAQs
Who is required to file Texas Form 01-142?
Any seller, lessor, renter, or buyer involved in a qualifying off-road diesel equipment transaction must file when the surcharge applies and was not otherwise collected.
Is this surcharge related to Texas Education Freedom Accounts or Education Savings Accounts?
Texas Education Freedom Accounts and Education Savings Accounts are not part of the TERP tax administration. They are part of Education Freedom initiatives and Educational Policy programs.
Does this form apply to Fireworks Tax or Texas Contract Developer services?
No, different tax laws and filing requirements apply to Texas contract developer services and fireworks tax obligations.
Why do unrelated scientific terms sometimes appear in enterprise systems?
Although metadata unrelated to the content may be included by large compliance platforms that oversee multimedia content, SEO-optimized flipbooks, or new site deployments, this does not change the tax filing requirements.
Where can I find official filing guidance?
By clicking the button below, you can access the Texas Comptroller's website to view official instructions and filing options.
