Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 66-61

1966-1 C.B. 250

IRS Headnote

Truck chassis, designed to be equipped with high pressure pumping equipment for use in furnishing pumping services in oil fields, are subject to the tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954.

Full Text

Rev. Rul. 66-61

Advice has been requested concerning the applicability of the manufacturers excise tax on motor vehicle articles to sales by the manufacturer of the truck chassis described below.

Pursuant to contracts with an oil well pumping service company, a manufacturer produces certain truck chassis designed to be equipped with high pressure pumping equipment. The company uses the high pressure pumps at oil well sites for such services as cementing casing in the hole, fracturing or acidizing oil bearing sands, killing wells out of control, etc.

The truck chassis in question resemble more conventional truck chassis to the extent they are equipped with pneumatic tires, standard lights, and a cab of conventional design. However, these chassis incorporate certain other features which distinguish them from conventional truck chassis. Such features include a reinforced frame with specially located cross-members to accommodate the high pressure pumping equipment, an oversized diesel truck engine to generate sufficient power for operating pump equipment, a heavy-duty power transmission or torque converter with specially designed hydraulic power take-off driving system, a cooling system which cools not only engine oil and water but also the hydraulic system of the transmission or converter, and a fireproof exhaust system.

In addition to the above features, the truck chassis are so designed as to remain within the maximum size and weight limitations established with respect to highway use under the laws of the various States in which the purchaser plans to use the vehicles. Among these are gross vehicle weight ratings of 45,000 pounds and under, front axle capacities of 13,000 to 16,000 pounds, and tandem rear axle capacities of 30,000 to 34,000 pounds. Such features are necessary because the nature of the purchaser's business requires that its service vehicles be available for prompt dispatch from service point to well site or from one oil field to another. Otherwise, the company would be required to obtain special permits for each movement of the vehicles over the highways, resulting in undesirable delays.

Section 4061(a)(1) of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated articles, including automobile truck chassis.

Section 48.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations provides that a chassis or body specified in section 4061(a) of the Code which is not designed for highway use is not subject to the tax imposed by section 4061(a) of the Code.

Revenue Ruling 57-440, C.B. 1957-2, 721, holds, in part, that the manufacturers excise tax imposed by section 4061(a)(1) of the Code shall not apply to sales by the manufacturer, producer, or importer of any article, regardless of width, which is designed or adapted by the manufacturer for purposes predominantly other than the transportation of persons or property on the highway even though incidental highway use may occur.

The truck chassis in the instant case have certain features (such as reinforced frames, oversized engines, special cooling systems, etc.) which indicate they are designed and suitable for use off the highway. However, the chassis also have features (such as conventional cabs, pneumatic tires, gross weight ratings, and standard lights which are required for highway travel) which indicate they are designed and suitable for more than incidental use on the highway. Therefore, these chassis are concluded to be designed for general use both on and off the highway, rather than for purposes predominantly other than for highway use.

Accordingly, it is held that the manufacturers excise tax imposed by section 4061(a)(1) of the Code applies to the sale by the manufacturer of the automobile truck chassis described above.