Mobile machinery tax opposed - Equipment Report - Brief Article

C&D Recycler, March-April, 2003

The Association of Equipment Manufacturers (AEM) is among the industry groups opposing a proposed IRS regulation that would extend highway excise vehicle taxes to off-road machinery.

The Chicago based group has joined with the Specialized Carriers & Rigging Association (SC&RA) to file joint comments and to give testimony in Washington opposing the regulation.

The excise tax proposal would subject machinery- including mobile cranes, aerial lift trucks and perhaps mobile crushers-to motor vehicle taxes on fuel and tires, as well as other annual taxes. This equipment was previously exempt as it does not technically travel on highways unless mounted on a trailer.

"This difficult economic period is not the time to add substantial costs for consumers with taxes at the time of purchase and throughout the life of new machines," says AEM chairman David Woods, who is also CEO of Charles Machine Works Inc. in Perry, Okla.

The two groups argue that, unlike commercial highway vehicles that carry goods and passengers, mobile machinery vehicles are not productive when traveling on highways. Thus, while the operators of commercial highway vehicles attempt to ensure that their vehicles spend as much of their time as possible on the highway, the operators of mobile machinery vehicles try to maximize their productivity by maximizing their time at job sites. For such vehicles, highway time is nonproductive time, and they do not derive the same benefit from the public highways as taxable highway vehicles do.

The groups have helped enlist support from more than 50 members of the U.S. House and Senate who have written the IRS to express their opposition to the new taxes.