What Texas Form 01-142 (2025) Is For
Texas Form 01-142 is used to report and pay the Heavy-Duty Diesel Equipment Surcharge imposed under the Texas Emissions Reduction Plan. The surcharge supports programs funded through the Texas Emission Reduction Plan Fund, which aims to reduce emissions in accordance with applicable state regulations.
When off-road diesel equipment with engines rated at 50 horsepower or more is sold, leased, or rented in Texas, the form is applicable. The surcharge is reported separately and has its own filing requirements, even though it is connected to the Texas Sales and Use Tax.
When You’d Use Texas Form 01-142
Texas Form 01-142 must be filed by a taxpayer who sells, leases, rents, or buys qualifying off-road diesel equipment that is subject to the TERP tax. Sellers and lessors usually collect and pay the surcharge; however, if they fail to do so at the time of sale, buyers are required to report it themselves.
A taxpayer can also use this form to correct mistakes on tax returns that have already been filed. Taxpayers file amended returns to fix errors in their reports, change the amounts they owe in taxes, or ask for a refund if they paid too much or too little in taxes.
Key Rules or Details for 2025
Diesel vehicles that can go off-road and drive on public roads must have engines that meet the 50 HP Diesel Engine standard. The surcharge applies to the surcharge threshold. Common examples include construction tools, industrial machinery, and specialized heavy-duty tools used in farming or logging.
There are many exceptions in both the Tax Code and the Health and Safety Code. If you have the proper paperwork, you may not have to pay taxes on equipment that is only used for qualifying agricultural purposes, like making agricultural products or doing timber work.
The standard tax rate is a percentage of the purchase price, lease fee, or rental amount. State laws say that the rates for lease transactions can change depending on when the original contract was signed.
Step-by-Step (High Level)
Step 1: Obtain the current form and verify the taxpayer's details
Before entering any numbers, obtain the most recent Texas Form 01-142 from an official source and confirm that the taxpayer identification number and reporting period are accurate.
Step 2: Identify taxable off-road diesel equipment transactions
Examine documents to determine which transactions during the filing period are subject to the Heavy Duty Equipment Tax. Verify that every transaction satisfies the reporting requirements.
Step 3: Calculate the surcharge and exclude exempt transactions
Use the correct item percentage for each taxable transaction to figure out the surcharge. Only exclude exempt transactions that have proof, such as when the property is used for farming or logging.
Step 4: Apply credits only when allowed
Claim credits only after the customer has received a refund for the surcharge or, if necessary, has provided written consent. Maintain support for every credit that is asserted.
Step 5: Submit payment and reconcile internal accounts
Submit the return and payment using an approved method, such as Webfile or direct deposit. Make sure the surcharge is posted to the right liability or GL account, and keep the system logs and invoice ready for an audit.
Common Mistakes and How to Avoid Them
- Charging surcharge on non-qualifying items: Exclude repair parts and motor vehicle or recreational vehicle sales governed by the Transportation Code, and apply the surcharge only to qualifying off-highway equipment transactions.
- Accepting exemptions without verifying eligibility: Confirm agricultural or timber eligibility before accepting certificates, and retain complete documentation to support exempt treatment.
- Missing filing deadlines: Calendar due dates and file on time to avoid penalties, interest, and forfeited discounts tied to timely compliance.
- Using the wrong rate for older leases: Confirm the original lease contract date and apply the tax rate tied to that date, rather than using the current period rate.
What Happens After You File
Once filed, the return is processed by the Texas Comptroller, who also deposits the payment into the taxpayer's account. Electronically filed returns are typically processed more quickly than paper-filed returns, which can take several weeks to appear in Master Files Maintenance systems.
If problems are found, the Comptroller may request additional paperwork or an explanation to investigate the matter further. Reviews may examine files stored in the cloud, parts and facilities records, or photos taken with a digital camera or mobile-native apps that facilitate the review.
Claims for refunds are looked at within the time limit set by law. Refunds that have been approved can be sent by check or direct deposit; however, they may be reduced by any outstanding debts.
FAQs
Who must file Texas Form 01-142?
Any seller, lessor, or purchaser involved in a taxable off-road diesel equipment transaction must file Texas Form 01-142 when the surcharge applies.
When is Texas Form 01-142 due?
Returns are due on the 20th day of the month following the reporting period, as determined by the assigned filing frequency.
Can amended returns be filed electronically?
While other amended filings can be made electronically, amended returns that lower the amount of tax owed must be filed on paper after the initial deadline.
Does the surcharge apply to agricultural equipment?
Equipment used solely for qualifying agricultural purposes or producing farm products may be exempt from taxes if the proper documentation accompanies it.
How are refunds requested?
Refunds can be requested by filing an amended return or by submitting a refund claim with supporting documentation.
Which agencies oversee the surcharge program?
The Texas Commission on Environmental Quality, the Texas Comptroller, and other groups that follow the Health and Safety Code are responsible for oversight.
Where can taxpayers get assistance?
For advice on filing and compliance, taxpayers can consult with a qualified tax advisor or contact the Texas Comptroller directly.
