Passenger mile tax applies to vehicles designed to carry 15 or more passengers, but the tax computation is based on the actual number of passengers carried at a given time. Passenger Mile Tax applies to miles driven in unincorporated areas as well as to miles driven on federal and state highways.
Passenger Mile Tax does not apply when:
- Passenger service rendered within the boundaries of a city, city and county, or incorporated town by a company engaged in the mass transportation of persons by buses or trolley coaches.
- Vehicles registered and used as recreational vehicles.
Example Bus Trip #1
A bus with a seating capacity of 15 passengers only carried five passengers on a trip. It traveled within a city, then on a federal highway, and then exited the highway to drive the same city again.
Because the bus carried only five passengers, the passenger mile tax would be computed based on the five passengers for this trip and the passenger mile tax due is based on the miles driven on the federal highway.
Example Bus Trip #2
A bus with a seating capacity of 15 passengers carried 10 passengers on a trip. On this trip, the bus traveled from one city to another, passing through an unincorporated area.
For this trip, the passenger mile tax would be computed based on the 10 passengers on the trip and the passenger mile tax due is based on the miles driven in the unincorporated area.
Vehicles Registered in Another State
A vehicle carrying passengers that is registered in another state, and makes an occasional trip into Colorado, is allowed to pay the tax on a trip-by-trip basis. The fee is $25.00 or the actual tax, whichever is greater. The formula used to calculate the tax is $0.001 multiplied by number of passengers multiplied by number of Colorado miles.
How to Get a Passenger Mile Tax Account
Submit an Application for Passenger Mile Tax Account (DR 0278). One license is issued to each account. The license is issued for a calendar year and will be renewed automatically, if the account is in good standing.
Operators are required to make copies of the license for each qualified vehicle. Any vehicle subject to passenger mile tax must have a valid license in the vehicle at all times. Failure to display a copy of the license will result in the operator being required to purchase a trip permit.
A bond is not required unless a licensee fails to file timely tax returns, fails to remit taxes as due, or when an examination of the account otherwise indicates that a financial guarantee is necessary. If required, the bond will be determined by the Department at twice the estimated average net tax liability for a reporting period.
Buses with a seating capacity of fourteen (14) or fewer passengers do not have to stop and clear Colorado Ports of Entry. Commercially licensed buses with a passenger capacity of fifteen (15) or greater are also not required to stop and clear a Colorado Port of Entry, if they are legally licensed and registered to operate in Colorado.
IFTA licensees who are the owner and operator of commercial passenger carrying vehicles designed for 15 or more passengers are required to pay a passenger mile tax.
A passenger-carrying vehicle that makes two trips or less each month in Colorado is allowed to pay the tax on a trip-by-trip basis. The fee is $25 or the actual tax, whichever is greater. The tax formula is to multiply $0.001 by number of passengers, by number of Colorado miles.
These taxes can be paid at any Colorado Port of Entry. In cases where both International Fuel Tax Agreement (ITFA) and passenger mile tax apply, both returns must be filed.
For more information, review the FYI Excise 14 guidance publication.