In part, here is what Ruling 2004-80 says. “The vehicle tows trailers and semi-trailers; the trailers exceed 35 feet in length and have a gross vehicle weight rating of 20,000 pounds. … The cab has an electric trailer brake control that connects to the brakes of a towed trailer and to a hook up for trailer lights. The vehicle has two storage boxes behind the cab that can accommodate incidental items such as small tools and vehicle repair equipment.
“… Section 4051(a)(1) imposes an excise tax on the first retail sale of automobile truck chassis and bodies, truck trailer and semi-trailer chassis and bodies, and tractors of the kind chiefly used for highway transportation in combination with a trailer or semi-trailer. The tax is not limited to commercial vehicles. Thus, a vehicle may be subject to tax even if sold for use or used as a recreational or private tow vehicle rather than for commercial purposes.”
Many dealers nationwide do not collect excise tax on the sale of these heavy-duty pickups. Since the IRS has issued this ruling, though, dealers should consider collecting it.
Audit activities seem to have been focused on Ford trucks, but any conversion is at risk. While tax experts are advising dealers to collect the tax, dealers should rely on the 11th Circuit Court ruling if they have not collected it in the past.