Does maximum loaded vehicle weight influence chassis taxability?

By: Rose-Michele Nardi, Transport Counsel PC

This article was published in the May 2016 edition of NTEA News


Question: Can a truck chassis with a gross vehicle weight (GVW) greater than 33,000 pounds be treated as nontaxable under Internal Revenue Code (IRC) 4051 if sold with a body that limits maximum loaded vehicle weight to 33,000 pounds or less?


Answer: The loaded weight capacity of a body generally will not affect Internal Revenue Service (IRS) determinations on taxability.

As a practical matter, the IRS treats truck chassis as taxable if GVW is more than 33,000 pounds. When making a decision, the IRS typically will rely on the GVW established by the chassis manufacturer or seller. (Note, the IRS may disregard an established GVW if deemed unreasonable in a certain situation.)

Treasury Regulations state gross vehicle weight means “the maximum total weight of a loaded vehicle” (see Section 145.4051-1(e)(3)(i)). They also provide a “seller’s gross vehicle weight rating must take into account, among other things, the strength of the chassis frame and the axle capacity and placement” (see Section 145.4051-1(e)(3)(v)). If axle capacity exceeds 33,000 pounds, you likely will have an uphill battle convincing an IRS agent the chassis is not taxable.


Past determination
In Technical Advice Memorandum (TAM) 200606038, an IRS agent took the position that chassis GVW rating, based on axle capacity, was 49,520 pounds. In addition, the IRS concluded “the strength of the chassis frame exceed[ed] 33,000 pounds because the chassis could be ordered from the manufacturer with a front gross axle weight rating (GAWR) of 12,000 pounds and a rear GAWR of 23,000 pounds.”  

In this TAM, the body installed on the chassis was a 3,000-gallon tank body. The taxpayer argued the truck should not be subject to tax “because the maximum loaded weight of the truck cannot exceed 33,000 pounds.” The IRS responded that “[t]he limited capacity of the tank body does not dictate the tax status of the chassis because a body and a chassis are two separate taxable items.” Although the TAM ruling is not binding on the IRS, it provides guidance on how it might rule in a similar situation.

Under the reasoning of this TAM, body weight capacity constraints should not affect chassis taxability even if, as a result of body installation, maximum loaded vehicle weight is 33,000 pounds or less. In other words, the IRS generally will determine a chassis exceeding 33,000 pounds GVW is taxable, regardless of the body mounted on it, unless an exemption or exception otherwise applies to the chassis.

Rose-Michele Nardi is a shareholder of the Washington, DC law firm Transport Counsel PC. For 18 years, she has advised clients on the proper application of the retailer FET on trucks, trailers and tractors. Rose-Michele represents clients in IRS proceedings involving FET, and regularly presents webinars and seminars for truck dealers and upfitters.