ARTBA opposes proposed mobile machinery tax

A national road builders’ association is the latest group to express opposition to an Internal Revenue Service proposal to impose federal taxes on mobile construction machinery such as mobile cranes, mobile drilling units and other equipment that can be used on highways.

Under current law, vehicles that use the highway system are required to pay excise taxes to the federal government to improve and maintain the system. Vehicles that are designed exclusively for off-road use and “mobile machinery” that use highways at minimal levels, however, have been exempt from paying these taxes.
The IRS is proposing to expand the excise tax to cover mobile machinery because it thinks the equipment could be used on the nation’s highway system.

“Use of construction equipment has always been exempt from federal highway user fees because the machinery sits or is operated the majority of time off-road and is likely to be transported from job site to job site on top of a tax-paying highway vehicle,” the American Road & Transportation Builders Association said in a letter to the IRS. “Mobile machinery and its users should not be taxed the same as motor powered vehicles that are operated exclusively on the highway system simply because the IRS believes this equipment could be used on the highways.”

The excise taxes the IRS is considering are: