Tax

Kansas to Implement Commercial Vehicle Fee

June 2012
Author:  Bob Johnson Jr

Bob Johnson Jr

Partner

Manufacturing & Distribution

1201 Walnut Street
Suite 1700
Kansas City, MO 64106-2246

Kansas City
816.221.6300

As part of Kansas Gov. Sam Brownback’s significant tax revisions, he has signed into law a Commercial Vehicle Fee beginning in January 2014 to replace the outdated Motor Carrier Property Tax. The commercial vehicle fee will apply to all trucks or truck tractors registered for a gross vehicle weight of more than 10,000 pounds whether operated by for-hire or private carriers in either intrastate or interstate commerce.

The fee system will align Kansas with the International Registration Plan so that a carrier will pay the fee each year it renews its registration. The commercial vehicle fee will be apportioned to states based on the miles the carrier travels in the state. The new commercial vehicle fee does not apply to personal or farm-registered vehicles. The commercial vehicle fee will be as follows:

Weight Group

Vehicle Age

Fee

Up to 12,000 pounds

1 to 3 years

$250

Up to 12,000 pounds

4 to 6 years

$200

Up to 12,000 pounds

7 years and older

$150

16,000 - 24,000 pounds

All ages

$250

26,000 - 36,000 pounds

All ages

$300

42,000 - 54,000 pounds

All ages

$350

60,000 - 85,500 pounds

All ages

$400

Brownback hopes the Commercial Vehicle Fee will encourage more environmentally efficient fleet modernization. In addition, the savings opportunity for carriers could be $500 to $1,500 per truck per year. The governor also sees the new fee system as a way to reduce administrative costs for the state.

Carriers are still required to pay the Motor Carrier Property Tax in 2012 and 2013. Beginning in 2014, carriers will be required to pay the Commercial Vehicle Fee in lieu of the property tax at the time of their vehicle registration.

With the replacement of the Motor Carrier Property Tax, Kansas is encouraging motor carriers to modernize their equipment without risk of paying higher taxes for the new equipment. In addition, by aligning with the International Registration Plan, Kansas likely will see an increase overall in tax revenue.

For more information, contact your BKD advisor.

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