Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 70-8

1970-1 C.B. 216

IRS Headnote

Truck tractors specifically designed for use in shifting semitrailers in and around freight terminals and freight yards are not subject to tax under section 4061(a)(1) of the Code.

Full Text

Rev. Rul. 70-8

Advice has been requested regarding the applicability of the manufacturers excise tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954 to the sale of the vehicle described below.

A company manufactures a truck tractor for use in freight terminals and truck yards. The vehicle is specifically designed to facilitate shifting of semitrailers within the terminal or yard. The gross weight of the tractor is 12,000 pounds and it is built without rear springs. The fifth wheel can be adjusted vertically by the operator from controls within the cab, permitting the semitrailers to be raised and moved without raising the landing gear. The vehicle has a relatively short wheel base and high center of gravity, which enhance its maneuverability and give it a short turning radius. It has a one-man operator's cab, a sliding rear window, and a swivel seat, enabling the driver to hitch and unhitch the semitrailer connections from within the cab. The tractor has a maximum speed of 27 miles per hour; however, when pulling a fully loaded semitrailer, its maximum speed is reduced to 7 miles per hour.

Section 4061(a)(1) of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated motor vehicle articles. Included in this list are tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer.

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) which is not designed for highway use is not subject to the tax imposed by that section. The following are examples of vehicles not designed for highway use, and therefore not taxable: Road graders, bulldozers, power shovels, earth movers, farm tractors, motor-driven vehicles designed and adapted for use in pulling or drawing vehicles around the premises of factories and railway stations, and small trucks for handling baggage and trucks at railway stations.

The tractor described above, because of its design characteristics, low speed ratings, lack of rear springs, and high center of gravity, is not suitable for highway use. Since the tractor is designed for use only within truck terminals and freight yards, it is a non-highway vehicle of the type described in section 48.4061(a)-1(d) of the regulations.

Therefore, it is held that sales of these tractors are not subject to the tax imposed by section 4061(a)(1) of the Code.