Double Tax For Truck Driver

Topic 23778 | Page 2

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David D.'s Comment
member avatar

I wouldn't be so quick to throw in the towel on paying tax on "Louisiana source income". I found this on the Internet and I think that the Cornell University Law School web site is dead-on accurate when it come to tax law.

US Code Title 49, Sec 14503(a) says, "No part of the compensation paid by a motor carrier providing transportation subject to jurisdiction under subchapter I of chapter 135 or by a motor private carrier to an employee who performs regularly assigned duties in 2 or more States as such an employee with respect to a motor vehicle shall be subject to the income tax laws of any State or subdivision of that State, other than the State or subdivision thereof of the employee's residence". - http://www.law.cornell.edu/uscode/html/uscode49/usc_sec_49_00014503----000-.html

If you get paid on a 1099 instead of a W-2 you still in the clear as the same federal law defines and employee as:

(2) "employee" means an operator of a commercial motor vehicle (including an independent contractor when operating a commercial motor vehicle), a mechanic, a freight handler, or an individual not an employer, who- You might also want to bring to the attention of your employer the following:

(c)Filing of Information.— A motor and motor private carrier withholding pay from an employee under subsection (a) of this section shall file income tax information returns and other reports only with the State and subdivision of residence of the employee. In plain English all the above gobbledygook says that you only have to pay tax in your state of residence (Texas) and that your employer can only file your state W-2 with the State of Texas. Since Texas has no state income tax you're home free. Now having said that be nice when you tell your employer this, they may have been examined by Louisiana and told that they have to withhold Louisiana income tax on all of their employees. From the above that is not true, but then state tax examiners are not necessarily well schooled on federal income tax law or transportation law for that matter.

Having said all of that I hope that you work in more than one state not just Louisiana. If you work just in Louisiana you're screwed.

Commercial Motor Vehicle:

A commercial motor vehicle is any vehicle used in commerce to transport passengers or property with either:

  • A gross vehicle weight rating of 26,001 pounds or more
  • A gross combination weight rating of 26,001 pounds or more which includes a towed unit with a gross vehicle weight rating of more than 10,000 pounds
  • OWI:

    Operating While Intoxicated

Diver Driver's Comment
member avatar

I live in Lousy-anna (yeah I hate it here) but work for Prime, which is based in Missouri. Under your example, I'd be paying Missouri state income tax. I DON'T. Check your W-4.

Grumpy Old Man's Comment
member avatar

I wouldn't be so quick to throw in the towel on paying tax on "Louisiana source income". I found this on the Internet and I think that the Cornell University Law School web site is dead-on accurate when it come to tax law.

US Code Title 49, Sec 14503(a) says, "No part of the compensation paid by a motor carrier providing transportation subject to jurisdiction under subchapter I of chapter 135 or by a motor private carrier to an employee who performs regularly assigned duties in 2 or more States as such an employee with respect to a motor vehicle shall be subject to the income tax laws of any State or subdivision of that State, other than the State or subdivision thereof of the employee's residence". - http://www.law.cornell.edu/uscode/html/uscode49/usc_sec_49_00014503----000-.html

If you get paid on a 1099 instead of a W-2 you still in the clear as the same federal law defines and employee as:

(2) "employee" means an operator of a commercial motor vehicle (including an independent contractor when operating a commercial motor vehicle), a mechanic, a freight handler, or an individual not an employer, who- You might also want to bring to the attention of your employer the following:

(c)Filing of Information.— A motor and motor private carrier withholding pay from an employee under subsection (a) of this section shall file income tax information returns and other reports only with the State and subdivision of residence of the employee. In plain English all the above gobbledygook says that you only have to pay tax in your state of residence (Texas) and that your employer can only file your state W-2 with the State of Texas. Since Texas has no state income tax you're home free. Now having said that be nice when you tell your employer this, they may have been examined by Louisiana and told that they have to withhold Louisiana income tax on all of their employees. From the above that is not true, but then state tax examiners are not necessarily well schooled on federal income tax law or transportation law for that matter.

Having said all of that I hope that you work in more than one state not just Louisiana. If you work just in Louisiana you're screwed.

Great post. An accountant should know all the angles involved

Commercial Motor Vehicle:

A commercial motor vehicle is any vehicle used in commerce to transport passengers or property with either:

  • A gross vehicle weight rating of 26,001 pounds or more
  • A gross combination weight rating of 26,001 pounds or more which includes a towed unit with a gross vehicle weight rating of more than 10,000 pounds
  • OWI:

    Operating While Intoxicated

David D.'s Comment
member avatar

Thanks for the props Grumpy. I've got a little advantage, I really am a CPA but I don't play one on TV.

Grumpy Old Man's Comment
member avatar

Thanks for the props Grumpy. I've got a little advantage, I really am a CPA but I don't play one on TV.

LOL, see? He proved my point, get an accountant! smile.gif

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