Rev. Rul. 69-340

Advice has been requested whether the motor vehicle described below constitutes a "highway motor vehicle" for purposes of the highway use tax imposed by section 4481 of the Internal Revenue Code of 1954.

A certain self-propelled motor vehicle is designed and constructed to transport specialized oilfield equipment and machinery over the highway from one job site to another. The equipment and machinery are mounted on the vehicle so as to become integral parts thereof, but the mobility of the vehicle is not directly utilized in the performance of the function of the machinery and equipment. Because of the vehicle's specific design features and characteristics, if the equipment and machinery were removed the vehicle would not be suitable for any other highway transportation purpose. Nevertheless, providing mobility over the highway for the machinery and equipment is the most significant reason for construction of the entire vehicle as a piece of unitized equipment and this mobility clearly enhances the economic utility of the machinery and equipment thereon by making available a broader geographic use of the specialized equipment.

Section 4481(a) of the Code imposes a tax on the use of any highway motor vehicle which has a taxable gross weight of more than 26,000 pounds.

Section 41.4482(a)-1(c) of the Highway Motor Vehicle Use Tax Regulations provides as follows:

"Highway vehicle. The term 'highway motor vehicle' does not include any vehicle which, although propelled by means of its own motor, is of a type not used for highway transportation, that is, of a type designed and manufactured for a purpose other than highway transportation. For example, vehicles such as earth movers, trench diggers, and bulldozers, which are designed and manufactured as self-propelled units for 'off-the-road' operations, are not highway motor vehicles for purposes of the regulations in this part. Neither are such motorized vehicles as road graders or rollers, which are designed and manufactured for construction or maintenance of roads, considered to be highway motor vehicles. The same is true of farm tractors, cotton pickers, and other motorized agricultural implements of a similar nature. However, the fact that equipment or machinery having a specialized use (as for example, an air compressor, crane, or specialized oilfield machinery) is mounted on a vehicle which, apart from such equipment or machinery, is of a type used for highway transportation will not remove such vehicle from classification as a highway motor vehicle."

The broad intent of Congress in enacting the highway use tax on trucks was to tax vehicles exceeding a certain weight that are designed to transport a load over the highways. The regulation quoted above, read in its full context, carries into effect this intention of Congress by carving out from the tax only those vehicles clearly designed for off-highway use. The last sentence of the regulation sets forth the complementary rule where specialized equipment is mounted on a vehicle designed for highway purposes. Such equipment would be mounted on what might normally be considered the conventional type of truck chassis. The sentence is not meant to be, nor should it be, narrowly construed as excluding from the tax other vehicles not wholly conventional in style but which are nevertheless designed to transport a load, albeit specialized in nature, over the highways.

Accordingly, a vehicle otherwise classifiable as a "highway motor vehicle" for purposes of the tax imposed by section 4481 of the Code, is not removed from such classification merely because the specialized machinery and equipment that it is designed and constructed to transport are such an integral part of the vehicle that its removal would cause the vehicle to be unsuitable for any other highway transportation purpose.

Therefore, it is held that the motor vehicle described in this Revenue Ruling is a "highway motor vehicle" for purposes of the tax imposed by section 4481 of the Code.