Rev. Rul. 81-71

1981-1 C.B. 496, 1981-9 I.R.B. 49.

                       Internal Revenue Service
                                 Revenue Ruling

                TRUCK CHASSIS; PERMANENT MOBILE MOUNT FOR CRANE

                            Published: March 2, 1981

SECTION 4061.--IMPOSITION OF TAX, 26 CFR 48.4061(a)-1: Imposition of tax; exclusion for light-duty trucks, etc

  Truck chassis; permanent mobile mount for crane. Sales of truck chassis that are specially designed and constructed to serve as permanent mobile mounts for telescoping boom-type cranes and to transport the cranes over the highway to off-highway job sites are not taxable under section 4061(a)(1) of the Code.

ISSUE

  Is the described truck chassis, which is used to transport a mobile boom-type crane from one operating site to another, subject to the manufacturers excise tax?

FACTS

  A company manufactures a custom-built truck chassis that is specially designed to serve as a mobile mount for a telescoping boom-type crane.  The crane is equipped with an aerial work platform and is transported over the highway to various off-highway job sites where it provides access generally to construction areas that would otherwise require scaffolding and rigging. It may also be used for utility work, firefighting, rescue operations, or anywhere an aerial platform is needed.  The crane has a boom length in excess of 30 feet and can support platforms that can be extended to working heights of up to 150 feet.

  The chassis is constructed with a reinforced box-type frame that is specially designed to withstand torsional stresses imposed by the articulation of the crane and that contains a built-in hydraulic reservoir and controls used to operate the crane.  The chassis also serves as the base upon which the turntable for the crane is mounted.  The rear suspension system of the chassis includes tandem axles of the walking beam-type that are welded directly to the chassis frame without load cushions or springs.  This form of suspension system, together with both front and rear outrigger assemblies, is designed to stabilize the vehicle when the crane is in use. These special design features render the chassis substantially different structurally from a chassis that would ordinarily be used to haul machinery or equipment other than the crane or similar machinery or equipment requiring such a specially designed chassis.

LAW AND ANALYSIS

  Under section 4061(a)(1) of the Internal Revenue Code a tax is imposed on sales of truck chassis by the manufacturer.

  Under sections 48.4061(a)-1(a)(2) and (e)(1) of the Manufacturers and Retailers Excise Tax Regulations, a truck chassis generally is taxable if it is, in any sense, reasonably suitable for use as a part of a highway vehicle, as defined in section 48.4061(a)-1(d).  Under section 48.4061(a)-1(d)(i), a highway vehicle is any vehicle designed to transport a load over the public highways, whether or not designed to perform other functions, subject to the following exceptions.

  Section 48.4061(a)-1(d)(2)(i) of the regulations states that a self-propelled vehicle is not a highway vehicle if it (A) consists of a chassis on which is permanently mounted machinery or equipment performing a construction, manufacturing, processing, farming, mining, drilling, or timbering operation, or similar operation, and such operation is unrelated to transportation on or off the

highway, (B) the chassis has been specifically designed to serve only as a mobile carriage and mount for the machinery or equipment, and (C) by reason of such special design, the chassis would require substantial structural modification in order to be

used to transport any load other than the same or similar machinery or equipment.

  The chassis in this case is designed to transport property over the highway and is taxable under section 4061(a)(1) of the Code unless it meets the nonhighway requirements in section 48.4061(a)-1(d)(2)(i) of the regulations.

  The crane is permanently mounted on the chassis and is used to perform construction operations and other operations that are unrelated to transportation on or off the highway.  Thus, the requirements of part (A) of section 48.4061(a)-1(d)(2)(i) of the regulations are met.

  Moreover, the chassis possesses special design characteristics including box- frame construction for withstanding torsional stresses imposed by the crane, built-in hydraulic reservoirs and controls for operation of the crane, and a rear axle walking beam suspension that is designed to stabilize the chassis when the crane is in use.  The chassis is thus specially designed to serve only as a mobile carriage and mount for the crane, satisfying the requirements of part (B) of section 48.4061(a)-1(d)(2)(i) of the regulations. Finally, these special design features of the chassis render the chassis substantially different structurally from a chassis that would ordinarily be used for hauling a load other than the crane or similar machinery or equipment requiring such a

specially designed chassis.  Therefore the chassis satisfies the requirements of part (C) of section 48.4061(a)-1(d)(2)(i) of the regulations.  See Rev. Rul. 79-423, 1979-2 C.B. 386.

HOLDING

  Sales of the truck chassis by the manufacturer are not subject to the tax imposed by section 4061(a)(1) of the Code.

Rev. Rul. 81-71, 1981-1 C.B. 496, 1981-9 I.R.B. 49.