close
Share with your friends

Comments requested, fuel excise tax regulations related to power take-off

Fuel excise tax regulations related to power take-off

The IRS today released an advance version of Notice 2019-10 that requests comments on possible changes to the rules governing the excise tax treatment of fuel used in a motor vehicle to operate “auxiliary equipment.”

1000

Related content

Notice 2019-10 [PDF 50 KB] states that the IRS and Treasury Department are considering “revisiting the treatment of fuel used in a motor vehicle to operate special or auxiliary equipment unrelated to the propulsion of the vehicle by means of a power take-off or power transfer….”  Comments are requested as to whether the excise tax exemption available for the off-highway business use of fuel should be applied to fuel used by a vehicle’s propulsion motor to power auxiliary equipment that is unrelated to the propulsion of the vehicle. Comments are requested concerning:

  • How the exemption could be applied equitably across different industries and categories of highway motor vehicles
  • How highway motor vehicle operators could effectively document and support an exemption with respect to the various categories of highway motor vehicles and auxiliary equipment

A specific request for comments is included in Notice 2019-10, and comments are due by July 23, 2019.

Background

In general, a federal excise tax credit may be claimed for taxed fuel used in an off-highway business use. This includes a credit for fuel used in a highway motor vehicle to power auxiliary equipment through a separate motor if certain requirements are met. However, fuel used to operate equipment on the vehicle by means of power take-off or power transfer is not eligible for the credit under existing excise tax regulations.

Notice 2019-10 states that industry groups have requested a change to these regulations based on technological advances that now allow highway motor vehicles to quantify the fuel used to power auxiliary equipment via a power take-off or power transfer, and that also provide greater fuel efficiency than separate motors when used to power the equipment.


For more information, contact a tax professional with KPMG’s Excise Tax Practice group:

Deborah Gordon | +1 (202) 533 5965 | dkgordon@kpmg.com

Taylor Cortright | +1 (202) 533 6188 | tcortright@kpmg.com

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

Request for proposal