RMA fights proposed IRS off-highway tire excise tax

Nov. 14, 2002

The Rubber Manufacturers Association (RMA) is fighting a rule proposed by the Internal Revenue Service (IRS) that would mean more excise taxes for tire manufacturers.

The proposed rule would create several new classes of off-highway vehicles and the tires they use subject to federal excise taxes that finance the Highway Trust Fund.

It would narrow the definition of "mobile machinery" allowing for heavy equipment such as mobile cranes, mobile drilling units and concrete pumpers to be subject to substantial new taxes where currently they are exempt.

If adopted, the rule would make tire manufacturers pay excise taxes on the heavy-duty tires that are fitted on the vehicles, says the RMA.

Joining with the Mobile Machinery Caucus, the group argues that such heavy-duty equipment makes minimal use of the highway and spends most of its time off-road. Most of this equipment is transported between job sites on highway vehicles that are already subject to this excise tax, says the group.

"This equipment's use of the highway is so minimal that it is unfair and wrong to tax them as though they exclusively use the highway," says John Falardeau, RMA state legislative manager.

A decision on the IRS proposal is due early next year. The RMA and the coalition are working to garner congressional support against the proposed measure.