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IRS Proposal to Limit Highway Tax Exemption for Mobile
Machinery
Since 1956, federal highway construction has been supported
through highway use taxes. There are four taxes levied: fuel
tax on gasoline ($.184/gallon) and diesel fuel ($.244/gallon),
tire excise tax on heavy duty tires (complicated), truck and
trailer excise tax (12% tax on the purchase price of the chassis),
and annual heavy vehicle tax (based on weight capped at $550/year).
Because the tax is a highway use tax, equipment that is not
principally a highway vehicle has been exempt from these highway
use taxes. Farm equipment, off-road equipment and "special
mobile" equipment has been exempted by IRS from purchase
and fuel excise taxes.
In June 2002, the IRS proposed a rule that broadens the definition
of a taxable "vehicle" and ends the tax exemption
for mobile equipment that might ever travel on the roads.
Current law applies a use test. If equipment is primarily
used in off-road situations, it is exempt. Under the proposed
rule, equipment that can use the roads is taxed whether or
not its primary use is off-road.
For more details on this
issue, click here to read our FAQ.
We need your help!
As an owner of concrete pumps, we believe this proposal would
have a significant, negative impact on your company's operational
costs. The IRS has allowed for a comment period before they
decide whether or not to implement the rule.
We are asking each member to print the letter below on their
company letterhead, sign the letter, and send to each of their
state congressmen and senators. Although the comment period
has been extended to December 03, 2002, it is crucial to stay
actively involved in the campaign to defeat this proposal.
Enactment of this regulation would have a significant, negative
impact on your company's operational costs. A concentrated
effort is required in order to effectively influence the IRS
decision.
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