Are you using owner operators or independent contractors (IC)? If so, there’s a new Department of Labor rule regarding the classification of employees that may have a substantial impact on your current operations. The rule institutes a new six-factor economic reality test to determine whether a worker is classified as an independent contractor or employee. Under the new test, the worker is not likely to be an independent contractor if the worker is economically dependent on an employer for work. How we can help CLA recently released a new article detailing the new rule and what actions compani ..read more

The U.S. Environmental Protection Agency last week announced new national greenhouse gas pollution standards for freight trucks and other heavy-duty vehicles, affecting vehicles for model years 2027 through 2032. The new standards aim to cut 1 billion tons of greenhouse gases by 2055. When do the new rules start? The new standards will be phased in, with a more stringent ramp up after 2030. The EPA doesn’t expect immediate results. EPA modeling predicts 12-25% of large freight trucks will be zero-emissions vehicles by the early 2030s. The modeling predicts about 40% of smaller heavy-duty truck ..read more

Pass-through entities in many U.S. states now have the option to calculate and pay income tax at the entity level. This may be advantageous for taxpayers seeking to lower their federal income tax liability. Is your transportation or logistics company a partnership, LLC, or S corporation? If so, you may benefit from making a state pass-through entity tax election to claim a federal tax deduction. Watch our new video, SALT — Pass-Through Entity Tax Election, to learn more. How we can help We can help you evaluate this tax strategy — and offer other tax planning opportunities for even more savin ..read more

Though not new in 2024, transportation companies traveling through Massachusetts should keep their relatively recent imposition of sales/use tax on rolling stock in mind as risk and exposure is considered. Back in 2023, the Massachusetts Department of Revenue published Directive 23-1 which outlined its position that rolling stock which enters the state for more than six days is subject to sales/use tax, less a credit for tax paid to other jurisdictions. The challenge with Massachusetts’ sales/use tax on rolling stock Why is this an issue? Most states provide sales and use tax exemptions on rol ..read more

Earlier this week, we laid out how the Inflation Reduction Act (IRA) can provide many tax benefits and financing opportunities. One of the game changers in the IRA was the ability for green energy project developers to sell their tax credits to other taxpayers. This was done to help spur economic development as the government found developers couldn’t always use these tax credits, thus previous legislation wasn’t driving enough desired activity. Through the IRA, green energy developers can now monetize these tax credits through selling them to taxpayers. The opportunity for taxpayers is having ..read more

The Inflation Reduction Act is a game changer for investing in clean energy, offering new tax incentives, and financing opportunities. Just about any organization can benefit, including many transportation and logistics companies. The Inflation Reduction Act enacted and modified several federal clean energy tax credits and made them refundable and transferable. The range of credit-eligible activities is expansive, covering everything from solar panels to electric vehicles.  The IRA provides tax credits to spur clean energy, domestic manufacturing, economic revitalization, and well-paying ..read more

A few weeks ago, we wrote about a bi-partisan agreement for some tax relief and how the sponsors were hoping for a quick bill passage. The “Tax Relief for American Families and Workers Act of 2024” (H.R. 7024) actually was voted on and passed in the House on January 31. The bill was then sent to the Senate for a potential vote. The Senate went on a recess February 9, and isn’t scheduled to be back in session until the last week of February. Even when the Senate comes back into session, there is an expected debate on this bill. There will also be a packed agenda so it’s hard to say if and/or wh ..read more

It’s cold here in Wisconsin right now but sometimes winter produces the brightest days. Plus, it’s that time of year when we think about taxes. Given that, let’s talk solar power and tax credits. If you are seeking ways to reduce your utility bill, decrease your business’s environmental impact, acquire equipment to depreciate, and receive a tax credit, then the investment tax credit (ITC) might be for you. For warehouse or distribution centers — where assets typically have long depreciation lives — this may be an especially attractive tax benefit. There are several nuances to the credit, but f ..read more

This week Jason Smith (R), the House Ways and Means Committee Chair and Ron Wyden (D), the Senate Finance Committee Chair announced a bi-partisan agreement they called “The Tax Relief for American Families and Workers Act of 2024.” The proposed legislation includes some significant changes that could provide some tax relief for transportation and logistics companies. The proposed legislation would include the following: Revives 100% bonus depreciation for property placed in service after December 31, 2022 and before January 1, 2026. Retroactively restores the ability to deduct research and ex ..read more

Beginning January 1, 2024 the standard mileage rates for automobiles have been updated. 67 cents per mile driven for business use 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces 14 cents per mile driven in service of charitable organizations The business use amount noted above is up 2.3% from 2023 while the 21 cents per mile for medical or moving purposes (subject to qualifications) is a 4.5% decrease. The rate for miles driven in service to charitable organizations is set by statute and has remained unchanged since 1998. The busi ..read more