TAX FILE

For decades the Internal Revenue Service has exempted “mobile machinery” such as self-propelled cranes from the 12% federal excise tax on new trucks. Now the IRS has proposed eliminating the exemption for vehicles that can travel on public highways, although the “job site machinery” mounted on such vehicles will still be exempt (see Federal Register, June 6). The IRS is accepting comments on the proposed regulation until Sept. 4.

In a separate ruling, the IRS has issued a technical advice memorandum (TAM 200227005) ruling that certain tractors and dump trucks used in oil fields are subject to the truck excise tax and the heavy vehicle use tax. Although a TAM applies only to a particular taxpayer, both the TAM and the proposed regulation show that the IRS is taking a hard line on equipment that may be intended for off-road jobs but uses public roads to reach those sites.