IRS issues suitable-for-use guidelines

The IRS has issued guidance intended to help truck dealers determine if a truck body is subject to federal excise tax, according to the National Truck Equipment Association (NTEA).

Section 4051 of the Internal Revenue Code imposes a tax on the first sale of certain truck chassis and bodies. The excise tax does not apply to truck bodies and chassis suitable for use with vehicles that have a GVW of 33,000 lbs. or less or truck trailer and semi-trailer bodies and chassis suitable for use with vehicles that have a GVW of 26,000 lbs. or less.

In some cases, retailers do not know the GVW of the vehicle on which the body will be mounted, making it difficult to determine whether the body meets the "suitable for use" standard.

The guidance issued, Revenue Procedure 2005-19, establishes four classifications of truck body types that meet the "suitable for use" standard. Truck body types that meet these classifications are therefore excluded from the retail excise tax:

* Platform truck bodies 21' or less in length.

* Dry freight and refrigerated truck van bodies 24' or less in length.

* Dump truck bodies with load capacities of eight cu. yds. or less.

* Refuse packer truck bodies with load capacities of 20 cu. yds. or less.

These classifications are effective for sales on or after April 4, 2005. The guidance issued is a result of the Industry Issues Resolution (IIR) Program. Under IIR, taxpayers, associations and other groups representing businesses submit frequently disputed or burdensome tax issues for review. The goal of an IIR, when possible, is to resolve these differences by providing more effective guidance.

Revenue Procedure 2005-19 will be published in Internal Revenue Bulletin 2005-14, dated April, 4, 2005, and will be posted at Information on the IIR Program and how to submit business tax issues for the program can be found in Rev. Proc. 2003-36, 2003-18 I.R.B. 859, which is also available at

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