What Is an Oregon Highway Use Tax Bond?

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The Department of Transportation requires highway use tax bonds as a way of making motor vehicle carriers comply with certain state, city, county, or federal government licensing requirements. Because every entity has their own highway use tax bond form, you will need a different highway use tax bond for any state you will be transacting business in. 

If you want to conduct business in Oregon and operate a commercial vehicle that has a gross weight of more than 26,000 pounds or if you operate a commercial vehicle that weighs less than 26,000 pounds but you haul for-hire, then you must take out an Oregon highway use tax bond. 

Learn more about how you can get an Oregon highway use tax bond today!

Keep reading for more insight into what an Oregon highway use tax bond is and why you may need one. 

Oregon Highway Use Tax Bonds Explained

Whenever a motor carrier enrolls a vehicle (or multiple vehicles) in Oregon’s weight mile tax program, they have to file an Oregon highway use tax bond, a cash deposit, or some other form of security unless they have a Dun & Bradstreet rating of 3A2 or higher. 

Either option acts as a way to ensure payment of fees, taxes, charges, penalties and interest due under ORS 825 and 818.225. Oregon highway-use taxes are based on how many miles a vehicle travels in the state of Oregon, as well as how much the vehicles weigh. These taxes help pay for necessary highway construction, maintenance, and repairs. If an operator has a vehicle with a gross weight in excess of 26,000 pounds, they are required to post a highway use tax surety bond to guarantee payment of required taxes. If they fail to pay their taxes, then the state of Oregon can file a claim against their Oregon highway use tax bond.

If this were to happen, then the surety bond company who issued the Oregon highway use tax bond will need to investigate the claim. If they determine that the claim is valid, they will then give the principal a chance to pay their taxes and satisfy the claim. If the principal fails to pay their taxes, then the surety company has to pay the state of Oregon from the bond amount. After that, the surety company will seek reimbursement of the money owed from the principal who will be responsible for paying it back. 

An Oregon highway use tax bond also mandates compliance with certain regulations and guidelines.

There are three parties involved in the issuing of an Oregon highway use tax bond.

• Principal. This is the license holder.

• Obligee. The obligee who requires the Oregon highway use tax bond (most often a government agency)

• Surety. The bond company that issues the bond and guarantees to the obligee that the principal will comply with all bond requirements.  

Why Do I Need an Oregon Highway Use Tax Bond

If you are a motor carrier who wants to enroll a vehicle in Oregon’s weight mile tax program then you legally have to secure an Oregon highway use tax bond. This requirement is set by the Oregon Department of Transportation Motor Carrier Transportation Division.

Alongside ensuring compliance, this type of surety bond helps guarantee the safety of all goods and passengers carried on enrolled motor vehicles. This is because an Oregon highway use tax bond also requires transportation companies (aka the bond principal) to follow all of the rules and regulations under the Oregon Revised Statutes Chapters 825 and 826.

What You Need to Know About Oregon Highway Use Tax Fees

Before you apply for an Oregon highway use tax bond, there’s a few helpful things to know about how Oregon highway use fees work—especially when it comes to penalty fees. 

Oregon highway use tax bonds are a requirement for all newly registered motor carriers. When it comes to being classified as a new carrier, this refers to any motor carrier that either hasn't received a permit or certificate of authority from the Department of Transportation in the past or operated in the state of Oregon for 12 months or more in the most recent 36 month period after they receive a permit or certificate of authority from the Department of Transportation. 

If a new motor carrier fails to secure an Oregon highway use tax bond, they risk incurring the following fees from the Department of Transportation.

• $2,000: 1 vehicle

• $2,000 plus $375 for each additional vehicle: 2 to 5 vehicles 

• $2,000 plus $250 for each additional vehicle: 6 to 10 vehicles

• $2,000 plus$125 for each additional vehicle: more than 10 vehicles

• Maximum deposit required: $10,000

Want to know how much an Oregon highway use tax bond will cost you? Get a quote today!

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