The Internal Revenue Service (IRS) has held in Technical Advice Memorandum 200341003 that certain vehicles that a taxpayer markets to recreational users as luxury tow vehicles are truck tractors subject to federal excise tax.
Types of trailers typically towed by these vehicles include horse and cattle trailers, racing car trailers, and recreational house trailers. The vehicles are primarily designed to tow a semitrailer since the vehicles are equipped with either a platform-mounted ball hitch (rated for a trailer with a maximum GVWR of 30.000 pounds) or an air-ride fifthwheel and a plug for trailer lights and brakes.
The IRS also held that, since the taxpayer relied on its own interpretation of the law, it was subject to retroactive application of the ruling.