Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 59-33

1959-1 C.B. 299

IRS Headnote

The retailers excise tax imposed by section 4041(a) of the Internal Revenue Code of 1954 does not apply to diesel fuel sold for use or used as fuel in certain logging vehicles which are not generally used on the highway but, by certain modifications, may qualify for a special permit for emergency highway use.

Full Text

Rev. Rul. 59-33

Advice has been requested concerning the applicability of the retailers excise tax on diesel fuel to sales for use or use of such fuel in certain types of logging vehicles.

Certain diesel-powered logging vehicles are operated on private roads within the confines of company-owned timber lands. These vehicles are not registered for use on highways because their width is in excess of that prescribed for highway use by the laws of the state in which they are operated. However, by certain modifications, the width of the vehicle may be changed to such an extent that they qualify for a special permit for highway use which is authorized by the state. On several occasions some of the vehicles have been temporarily converted for emergency use on the highway, under the special permit provisions. However, it is not economically feasible to continuously operate them on the highway, as the unloaded vehicles are close to state weight limitations, leaving very little load-carrying capacity.

Section 4041(a) of the Internal Revenue Code of 1954 imposes a tax upon diesel fuel (1) sold by any person to an owner, lessee, or other operator of a diesel-powered highway vehicle, for use as a fuel in such vehicle; or (2) used by any person as a fuel in a diesel-powered highway vehicle unless there was a taxable sale of such liquid under paragraph (1). Section 324.10(c) of Regulations 119, made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47, provides that the term `diesel-powered highway vehicle' has reference to the type of vehicle and not to the use which is made of the vehicle. The term includes any vehicle powered or propelled by a diesel motor or engine and of the type which is capable of general use upon public highways, such as automobile trucks, busses, highway tractors, etc. The term does not, however, include equipment designed primarily for off-highway use, such as road graders, bulldozers, power shovels, earth movers, farm tractors, etc.

The logging vehicles, in the instant case, are of the type primarily designed and adapted for purposes predominantly other than general use upon public highways. Consequently, the logging vehicles are not considered to be diesel-powered highway vehicles within the meaning of section 4041(a) of the Code. Therefore, it is held that the retailers excise tax imposed by that section does not apply to diesel fuel sold for use or used as a fuel in such vehicles.