ARTBA opposes IRS move

News December 10, 2002
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The American Road & Transportation Builders Association (ARTBA) has expressed the transportation construction industry's opposi

The American Road & Transportation Builders Association (ARTBA) has expressed the transportation construction industry's opposition to an Internal Revenue Service (IRS) proposal to impose federal taxes on mobile construction machinery such as mobile cranes, mobile drilling units and concrete pumpers.


Under current law, vehicles that use the highway system are required to pay excise taxes to the federal government to improve and maintain the system. Vehicles designed exclusively for off-road use and "mobile machinery" that use highways at minimal levels, however, have been exempt from paying these taxes.


The IRS is proposing to expand the excise tax to cover mobile machinery because it believes the equipment could be used on the nation's highway system. The applicable excise taxes are:


* New vehicle excise tax (currently 12% of purchase price);


* Motor fuel taxes (18.4 cents per gal on gasoline and 24.4 cents per gal on diesel);


* Tire excise fee on heavy duty tires; and


* Annual heavy vehicle tax (based on weight and capped at $550).


"Use of construction equipment has always been exempt from federal highway user fees because the machinery sits or is operated the majority of the time off-road and is likely to be transported from jobsite to jobsite on top of a tax-paying highway vehicle," ARTBA said in comments to the IRS. "Mobile machinery and its users should not be taxed the same as motor-powered vehicles that are operated exclusively on the highway system simply because the IRS believes this equipment could be used on the highways."



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