Highway Use Taxes

Highway Use Taxes

August 01, 2004 | By Keith Martin in Washington, DC

Highway use taxes must be paid on special trucks that utilities use to plant poles and make other repairs, a US appeals court said in July.

Florida Power & Light argued that two types of trucks it uses are essentially mobile equipment rather than highway vehicles. The federal government collects a tax of $100 to $550 a year on heavy trucks weighing 55,000 pounds or more. The big accounting firms have been urging utilities to file for refunds of the taxes they paid.

FP&L challenged the tax as it applied to 410 trucks equipped with pintle hooks. These types of trucks are used to lift linemen to work on poles and power lines, push and pull cable, and dig holes and set poles. It also disputed whether tax had to be paid on insular washer vehicles that are equipped with 1,200 gallon water tanks and are used to clean power lines.

The tax only applies to “highway vehicles.” A truck is not a “highway vehicle” under the IRS regulations if it is essentially mobile equipment. However, in order for this exemption to apply, heavy machinery must be mounted on a specially-designed chassis and “the chassis could not, without substantial structural modifications, be used” to carry any other load besides that particular equipment.

An appeals court said that the utility failed to prove its trucks fit under the exemption. The case is Florida Power & Light Company v. United States. The court released its decision on July 8.

Keith Martin