Definitions

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202623002
Release Date: 6/5/2026
Index Number: 4051.00-00, 4053.00-00,
7701.00-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
Telephone Number:
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Refer Reply To:
CC:ECE:B3
PLR-113981-25
Date:
March 02, 2026
LEGEND
Taxpayer = ---
Vehicle X Manufacturer = ---
Vehicle X = ---
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Unit 1 = ---
Unit 2 = ---
Vehicle 1 = ---
Vehicle 2 = ---
Trailer 1 = ---
Trailer 2 = ---
Component 1 = ---
Component 2 = ---
Component 3 = ---
Component 4 = ---
Load 1 = ---
PLR-113981-25 2
Load 2 = ---
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Load 3 = ---
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Trailer 1 Load = ---
Trailer 2 Load = ---
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State = ---
A = ---
B = ---
C = ---

F = ---
G = ---
H = ---
J = ---
K = ---
L = ---
M = ---
N = ---
O = ---
PLR-113981-25 3
Dear ---:
This letter responds to a ruling request dated July 16, 2025, submitted on your behalf by your authorized representative, requesting rulings that the first retail sales of Vehicle 1 and Vehicle 2 are not subject to the tax imposed by § 4051(a) of the Internal Revenue Code (Code) because the vehicles meet the off-highway vehicle exception under § 7701(a)(48)(A), or alternatively, because the vehicles meet the mobile machinery exemption under § 4053(8).
Taxpayer represents that, at the time this ruling request was submitted, the facts were as follows.

# FACTS

Taxpayer entered into an agreement with the U.S. military to supply Unit 1 and Unit 2.
Unit 1 is composed of Vehicle 1 and Trailer 1, and Unit 2 is composed of Vehicle 2 and Trailer 2. Vehicle 1 and Vehicle 2 are constructed using Vehicle X, which Taxpayer purchases from Vehicle X Manufacturer.
Vehicle X
Vehicle X measures approximately A feet long, and approximately B feet wide. Vehicle X has a gross vehicle weight rating (GVWR) of C pounds. The chassis of Vehicle X is capable of hauling 20-foot intermodal shipping containers and is equipped with a pintle hook that allows for a towing capacity of D pounds and a vertical load capacity of E pounds.
Vehicle X has features for off-road military operations, including the transport of heavy equipment. Vehicle X includes:
• Large, thick-treaded off-road tires, designed for enhanced traction and durability on rough terrain;
• Air-ride suspension, providing substantial ground clearance for off-road maneuverability;
• Specialized transmissions and gearboxes, configured for rugged, off-highway conditions; and
• Advanced axle systems, enabling (i) locking of all four axles to prevent tire spin on soft or loose surfaces, and (ii) activation of an 8x8 all-wheel drive mode for superior off-road performance.
Vehicle X also has features that support on-road use. Vehicle X is equipped with components that comply with U.S. Department of Transportation (DOT) requirements, such as headlights, reflective striping, windshield wipers, turn signals, and highway emergency marker kits. Additional road-capable features of Vehicle X include antilock braking systems, traction control, and the ability to maintain a maximum sustained speed of F miles per hour.
PLR-113981-25 4
Vehicle 1
Taxpayer adds Component 4, a hydraulic interface, and a parking brake signal wire to the Vehicle X chassis. All hardware specific to Vehicle 1 is attached to the chassis using existing hole locations or standard locking mechanisms. Taxpayer mounts Component 1 and Component 2 onto Component 4.
Vehicle 1 transports Load 1 utilizing Component 1, and Load 2 utilizing Component 2.
Vehicle 1 also tows Trailer 1, which carries Trailer 1 Load.
Assembling Component 2 and other components takes several weeks. Attaching Component 1 and Component 2 requires a minimum of one week. The components and hardware are designed to be installed for the full useful life of the vehicle.
Removing Component 1 and Component 2 from Vehicle X, if preserving reassembly capability, takes several days. Reassembly would require new materials such as bolts, greases, and adhesives. Installation and removal involve the use of a large overhead crane, an electrical and mechanical tool kit, and detailed knowledge of the assembly process, which is considered proprietary. Taxpayer represents that disassembling and reassembling Vehicle 1 is complex and resource-intensive.
When fully outfitted, Vehicle 1 has a GVWR of approximately G pounds, excluding Load 1 and Trailer 1. Trailer 1 adds an additional H pound GVWR. Vehicle 1 can travel at an average speed of J miles per hour and reach a top speed of K miles per hour.
Taxpayer has not represented that Vehicle 1 is oversize or overweight.
Taxpayer represents that Vehicle 1 is “significant military equipment” within the meaning of 22 C.F.R. § 120.36(b) and the United States Munitions List, 22 C.F.R. § 121.1 (USML).1 Taxpayer also represents that under Defense Transportation Regulation § 4500.9-R-Part III, app. F, § D.2, the transport of Load 1 on public highways is prohibited absent prior authorization by a DOT special permit or military air waiver.
The U.S. military’s specifications require that Vehicle 1 provide the ability to operate on primary, secondary, unimproved, and off-road locations. Taxpayer obtained special permission from the State Department of Transportation to operate Vehicle 1 on local public roads for limited purposes, including transportation to and from a supplier and for maintenance activities, without registering Vehicle 1 with State’s department of motor vehicles. In granting this permission, the State Department of Transportation determined that Vehicle 1 constituted “special mobile equipment” under State law. As a result, Vehicle 1 did not require titling or registration in State.
1 22 C.F.R. § 120.36(a) provides that significant military equipment means articles for which special export controls are warranted because of their capacity for substantial military utility or capability.
PLR-113981-25 5
Vehicle 2
Taxpayer adds a parking brake signal wire to the Vehicle X chassis. All hardware specific to Vehicle 2 is attached to the chassis using existing hole locations or standard locking mechanisms. Taxpayer also attaches Component 3 to the Vehicle X chassis.
Vehicle 2 transports Load 3 utilizing Component 3. Vehicle 2 also tows Trailer 2, which carries Trailer 2 Load.
Assembling Component 3 and other components takes several weeks. Attaching Component 3 requires two to three days. The components and hardware are designed to be installed for the full useful life of the vehicle. Disassembly takes less than one day. Installation and removal involve the use of a large overhead crane, an electrical and mechanical tool kit, and detailed knowledge of the assembly process, which is considered proprietary. Taxpayer represents that disassembling and reassembling Vehicle 2 is complex and resource-intensive.
When fully outfitted, Vehicle 2 has a GVWR of approximately L pounds, excluding Trailer 2’s GVWR of approximately M pounds. Vehicle 2 can travel at an average speed of N miles per hour and reach a top speed of O miles per hour. Taxpayer has not represented that Vehicle 2 is oversize or overweight.
Taxpayer represents that certain components integrated into Unit 2 are classified as “significant military equipment” within the meaning of 22 C.F.R. § 120.36(b) and the
USML. Taxpayer represents that, when in operation, Unit 2 poses a sufficient health risk to humans to make its operation inadvisable in densely populated areas.
The U.S. military’s specifications require that Vehicle 2 provide the ability to operate on primary, secondary, unimproved, and off-road locations. Taxpayer obtained special permission from the State Department of Transportation to operate Vehicle 2 on local public roads for limited purposes, including transportation to and from a supplier and for maintenance activities, without registering Vehicle 2 with State’s department of motor vehicles. In granting this permission, the State Department of Transportation determined that Vehicle 2 constituted “special mobile equipment” under State law. As a result, Vehicle 2 did not require titling or registration in State.

# LAW AND ANALYSIS

Section 4051(a)(1) imposes a 12 percent ad valorem excise tax on the first retail sale of automobile truck chassis and bodies, truck trailer and semitrailer chassis and bodies, and tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer.
PLR-113981-25 6
Section 4051(a)(3) provides that the § 4051 tax does not apply to truck trailer and semitrailer chassis and bodies, suitable for use with a trailer or semitrailer, with a gross vehicle weight of 26,000 pounds or less.
Section 145.4051-1(a)(2) of the Temporary Excise Tax Regulations under the Highway Revenue Act of 1982 provides that a chassis or body is taxable under § 4051(a)(1) only if the chassis or body is sold for use as a component part of a highway vehicle (as defined in § 48.4061(a)-1(d)), which is an automobile truck, truck trailer or semitrailer, or a tractor of the kind chiefly used for highway transportation in combination with a trailer or semitrailer.
Section 48.4061(a)-1(d)(1) of the Manufacturers and Retailers Excise Tax Regulations defines a “highway vehicle” as any self-propelled vehicle, or any trailer or semitrailer, designed to perform a function of transporting a load over public highways, whether or not also designed to perform other functions. For purposes of this definition, a vehicle consists of a chassis, or a chassis and a body if the vehicle has a body, but does not include the vehicle’s load.
Section 48.4061(a)-1(d)(1) provides that the term “transport” includes the term “tow.” Section 48.4061(a)-1(d)(1) defines “public highway” to include any road (whether a Federal highway, State highway, city street, or otherwise) in the United States which is not a private roadway.
Section 48.4061(a)-1(d)(2) provides exceptions to the definition of “highway vehicle” for certain mobile machinery and certain vehicles specially designed for off-highway transportation.
Section 7701(a)(48)(A) was added to the Code by the American Jobs Creation Act of 2004, Pub. L. 108-357. It provides an off-highway vehicle exception to the definition of “highway vehicle.” This provision supersedes the prior regulatory off-highway vehicle exception in § 48.4061(a)-1(d)(2)(ii).
Section 7701(a)(48)(A)(i) provides that a vehicle will not be treated as a highway vehicle if such vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design such vehicle’s capability to transport a load over the public highway is substantially limited or impaired.
Section 7701(a)(48)(A)(ii) provides that, for purposes of § 7701(a)(48)(A)(i), a vehicle’s design is determined solely on the basis of its physical characteristics.
Section 7701(a)(48)(A)(iii) provides that, for purposes of § 7701(a)(48)(A)(i), in determining whether substantial limitation or impairment exists, account may be taken of factors such as the size of the vehicle, whether such vehicle is subject to the PLR-113981-25 7 licensing, safety, and other requirements applicable to highway vehicles, and whether such vehicle can transport a load at a sustained speed of at least 25 miles per hour. It is immaterial that a vehicle can transport a greater load off the public highway than such vehicle is permitted to transport over the public highway.
Section 4053(8) provides an exemption from the tax imposed by § 4051 for mobile machinery. Specifically, no tax is imposed on any vehicle that consists of a chassis—

(A) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,

(B) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and

(C) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.
Section 4053(8) was added to the Code by the American Jobs Creation Act of 2004.
This provision essentially codified the regulatory mobile machinery exception to the definition of highway vehicle in § 48.4061(a)-1(d)(2)(i).
There is no general exemption from the § 4051 tax for military vehicles.
Rev. Rul. 79-239, 1979-2 C.B. 367, holds that a four-wheel undercarriage (which is considered a trailer chassis) designed to transport a collapsible military antenna unit satisfies the mobile machinery exemption.2 The antenna unit is permanently bolted to the undercarriage and, once the antenna is erected, performs operations at off-highway sites. The undercarriage is specially designed to serve only as a mobile carriage for the antenna while it is being transported on and off the highway. The fact that the undercarriage does not serve as a mount for the antenna while in operation does not disqualify it as mobile machinery. Because of its special design, the undercarriage lacks an identifiable chassis frame, so it could not, without substantial structural modification, be used to carry any load other than the antenna unit.
Rev. Rul. 79-296, 1979-2 C.B. 370, holds that tax applies to the sale of truck-tractors and low-bed semitrailers that are designed to be used in combination to transport 2 Rev. Rul. 79-239 applies the regulatory mobile machinery exception in § 48.4061(a)-1(d)(2)(i), which is essentially identical to the codified exemption in § 4053(8). The revenue ruling concerns the now repealed § 4061 tax.
PLR-113981-25 8 military equipment on and off the highway.3 The vehicles are oversize and require special permits and/or escort vehicles on most state highways. These vehicles are designed to transport battle tanks, personnel carriers, construction equipment, semimobile mobile power plants, and other heavy loads over the highway from railheads, ports, or depots to user maintenance areas. The vehicles are also for use off the highway and over rough terrain, sand, and soft soils, to evacuate disabled battle tanks and similar vehicles from, and deliver high density cargo into, remote combat and field support areas. The truck-tractors are eight-by-eight with 22.5-tons capacity, 120inch width, and a maximum speed of 38.5 miles per hour with a heavy load. The lowbed trailers have four axles with 60-tons capacity and are 137 inches wide. The revenue ruling holds that the vehicles are not specially designed for the primary function of transporting the military equipment other than over the public highway because they are designed to carry the equipment both on and off the highway, with neither function being primary. The revenue ruling also holds that while the vehicles have characteristics that impair their use on the highway, in that they are oversize and require special permits and/or escort vehicles on most state highways, those characteristics are necessary to enable the vehicles to carry their intended load and accomplish their highway transportation function.
Notice 2017-5, 2017-6 I.R.B. 779, provides interim definitions of the terms “chassis” and “body” for purposes of § 4051(a)(1). Specifically, section 3.01 of the notice provides that a “chassis” is a vehicle’s frame and supporting structure and all those components attached to it (except those components that are exempt from tax). Components that are part of a chassis include, but are not limited to, the engine, axles, transmission, drive train, suspension, exhaust aftertreatment system, and cab. Section 3.02 of the notice defines a “body” as the cargo or load carrying structure of a truck, trailer, or semitrailer. Examples of a body include, but are not limited to, a flatbed body, a tanker body, and a box body.
Rockwater, Inc. v. United States, 121 F.4th 1287 (11th Cir. 2024), held that trailers that dried and transported peanuts from farm fields to off-site buying points were not offhighway vehicles within the meaning of § 7701(a)(48)(A). The trailers were not specially designed to transport peanuts off-highway, even though the trailers had special peanut-drying design features, because they were outfitted with standard highway equipment allowing them to operate at 55 miles per hour, were DOT compliant, and could travel on public highways without special permits or markings. The special peanut-drying design had nothing to do with off-highway transportation. Further, the design of the trailers did not substantially limit or impair the trailers’ on-highway capability given that they were not designated as oversize or overweight, were DOT compliant, could travel on public roads at 55 miles per hour, and were marketed as safe to handle loads of peanuts from the fields to the buying points, which almost always required travel on public roads. The court found Rockwater’s arguments about the trailers’ economic feasibility and the short duration of the harvest season unpersuasive, 3 Although Rev. Rul. 79-296 applies the regulatory off-highway vehicle exception in § 48.4061(a)-1(d)(2)(ii), the reasoning is analogous for purposes of this ruling.
PLR-113981-25 9 as the substantial limitation or impairment analysis concerns physical characteristics, not efficiency of vehicle operation.
Myles Lorentz, Inc. v. Commissioner, 138 T.C. 40 (2012), held that heavy-duty tractors used to tow “belly dump trailers” were not off-highway vehicles within the meaning of § 7701(a)(48)(A).4 The court noted that the word “primary” does not mean “exclusive,” but rather something similar to “of first importance” or “principally.” Myles Lorentz, 138 T.C. at 46 (citing Worldwide Equip., Inc. v. United States, 605 F.3d 319, 324 (6th Cir.
2010) and Malat v. Riddell, 383 U.S. 569, 571-72 (1966)) (referring to regulatory exception). The tractors were not specially designed to primarily transport a particular type of load, as they could tow a variety of trailers that could haul different types of loads. The tractors also were not designed primarily for off-highway transportation because they could haul loads, large or small, on a highway. The tractors could travel at regular highway speeds, did not require a special permit, were not overwidth or overweight for regular highway use, and did not exceed height restrictions. Thus, they were not substantially impaired in transporting “a load” over the public highway. The court noted that the term “transport” includes towing, and separately, that the substantial-impairment evaluation under § 7701(a)(48)(A)(i) is not limited to the load the vehicle customarily tows.
Florida Power & Light Co. v. United States, 375 F.3d 1119 (Fed. Cir. 2004), held that utility vehicles with a pintle hook affixed to the chassis did not meet the mobile machinery exemption.5 The vehicles were used to elevate personnel for utility work, lift materials, pull and push cable, dig holes, and set poles. The pintle hook was used to attach a trailer to the vehicles to haul materials for use with machinery or equipment on the vehicles. Because the chassis was not designed to transport only the attached machinery or equipment, but also to transport trailers and trailer loads, it had not been specially designed to serve only as a mobile carriage and mount for the machinery or equipment involved. The court emphasized that “[a]ny special modification of the chassis to enable transportation of items other than the designated machinery or equipment negates the exception.” Florida Power & Light, 375 F.3d at 1123.
Vehicle 1
Off-highway vehicle exception
To qualify for the § 7701(a)(48)(A) off-highway vehicle exception, a vehicle must meet two tests: (1) the special design test, which requires that the vehicle be “specially 4 The court applied the regulatory off-highway vehicle exception in § 48.4061(a)-1(d)(2)(ii) for one tax year that predated the effective date of § 7701(a)(48)(A). Ultimately, the highway-vehicle issue determined whether the taxpayer qualified for a credit with respect to fuel excise taxes due to off-highway business use.
5 Florida Power analyzed the regulatory mobile machinery exception in § 48.4061(a)-1(d)(2)(i) for purposes of the heavy highway vehicle use tax imposed by § 4481. The regulatory mobile machinery exception is essentially identical to the codified exemption in § 4053(8).
PLR-113981-25 10 designed for the primary function of transporting a particular type of load” off-highway; and (2) the substantial impairment test, which requires that the vehicle’s capability to transport “a load” over the public highway be substantially limited or impaired because of its special design. See § 7701(a)(48)(A)(i).
Vehicle 1 is not specially designed for the primary function of transporting a particular type of load. Vehicle 1 is designed to transport Load 1 and Load 2. However, Vehicle 1 is also designed to tow Trailer 1 and transport Trailer 1 Load. Thus, Vehicle 1 is not specially designed for the primary function of transporting Load 1 and Load 2 (or those particular types of loads). In addition, the Vehicle 1 chassis is equipped with a pintle hook that allows for a towing capacity of D pounds, which far exceeds Trailer 1’s GVWR.6 Like the heavy-duty tractors in Myles Lorentz, Vehicle 1 can tow a trailer and trailer load other than Trailer 1 and Trailer 1 Load. Therefore, Vehicle 1 is not specially designed for the primary function of transporting Trailer 1 Load, together with Load 1 and Load 2, or loads typified by these three loads. See § 7701(a)(48)(A)(i); Myles Lorentz, 138 T.C. at 46 (“primary” means “of first importance” or “principally”). For purposes of the special design test, a vehicle’s design is determined solely on the basis of its physical characteristics. See § 7701(a)(48)(A)(ii). Therefore, it is immaterial that Vehicle 1 is not used and/or not intended to be used to transport other loads.
Taxpayer also has not shown that Vehicle 1 is specially designed for the primary function of off-highway transportation. The U.S. military requires that Vehicle 1 provide the ability to operate on primary, secondary, unimproved, and off-road locations. While the primary, secondary, and unimproved roads envisioned may be outside the United States, when applying the special design test, a vehicle’s design is determined solely on the basis of its physical characteristics. See § 7701(a)(48)(A)(ii). Vehicle 1 has physical features that allow it to transport its loads off-highway, and other features that provide the capability to transport its loads on public highways. Vehicle 1 can travel over 25 miles per hour; has DOT-compliant components such as headlights, reflective striping, windshield wipers, and turn signals; and has public-highway features like antilock braking systems and traction control. See Rockwater, 121 F.4th 1287. Like the military vehicles in Rev. Rul. 79-296, and the heavy-duty tractors in Myles Lorentz, Vehicle 1 is not specially designed for the primary function of transporting a load offhighway. See also Myles Lorentz, 138 T.C. at 46 (discussing meaning of “primary”).
Similar to the Rockwater plaintiff’s marketing of its peanut-drying trailers as safe for transport over public roads, Taxpayer, by contracting to construct Vehicle 1 to the U.S. military’s specifications, must ensure that Vehicle 1 has the ability to operate on primary and secondary roads. Therefore, Vehicle 1 does not meet the special design test in § 7701(a)(48)(A)(i).
Vehicle 1 also does not meet the substantial impairment test in § 7701(a)(48)(A)(i) because Vehicle 1’s capability to transport a load over the public highway is not substantially limited or impaired. Taxpayer does not assert that Vehicle 1 is oversize or 6 Trailer 1’s GVWR falls below the threshold for taxation. See § 4051(a)(3).
PLR-113981-25 11 overweight, and the vehicle has DOT-compliant features for on-road use. Vehicle 1 can maintain an average speed of over 25 miles per hour while transporting a load. See § 7701(a)(48)(A)(iii). Vehicle 1 is subject to restrictive limitations when transporting Load 1 on the public highway, but such restrictions are load-based and are not due to the vehicle’s design for purposes of carrying Load 1. See § 7701(a)(48)(A)(i) (impairment must be “because of” a vehicle’s special design). Vehicle 1 can be driven on public roads. Further, Taxpayer has not shown that Vehicle 1’s capability to transport a load on the public highway is substantially impaired.
Like the vehicles in Rockwater and in Myles Lorentz, Vehicle 1 can be driven on the public highway and is not oversize or overweight. Rev. Rul. 79-296 held military vehicles to be highway vehicles even though they required special permits or escort vehicles to drive on the public highway due to their size.7 Unlike the vehicles at issue in
Rev. Rul. 79-296, Vehicle 1 does not require special permits or escort vehicles to drive on the public highway due to its design. Even if the load-based permitting restriction were considered a design-based impairment, Vehicle 1 need only be capable of transporting “a load” over the public highway without substantial impairment, not necessarily its intended loads. See § 7701(a)(48)(A)(i). Moreover, as in Rev. Rul. 79-296, any special permits or escorts that must be obtained for Vehicle 1 to transport its intended loads on the public highway enable it to accomplish its public highway transportation function.
The State Department of Transportation determined that Vehicle 1 is exempt from State registration and titling requirements as “special mobile equipment” under State law.
However, Vehicle 1 is generally still subject to other State law requirements relating to motor vehicles. The exemption from State registration and titling requirements is outweighed by other factors for purposes of the substantial impairment test in § 7701(a)(48)(A)(i).
Vehicle 1 fails both the special design test and the substantial impairment test.
Therefore, Vehicle 1 does not qualify for the off-highway vehicle exception under § 7701(a)(48)(A).
Mobile Machinery Exemption
To qualify for the mobile machinery exemption to the § 4051 tax, a vehicle’s chassis must meet three requirements per § 4053(8)(A) through (C), respectively: (A) the permanent mount test, which requires the permanent mounting of machinery or equipment to perform a certain jobsite “or similar” operation that is unrelated to transportation; (B) the special design test, which requires that the chassis be “specially 7 Rev. Rul. 79-296 applied the old regulatory test in § 48.4061(a)-1(d)(2)(ii), which looked to whether a vehicle was substantially limited or impaired in transporting its particular type of load, referred to as “such load,” over the public highway. As Myles Lorentz discusses, the statutory test in § 7701(a)(48) is harder to meet, as it changes the requirement from impairment transporting “such load” to impairment transporting “a load,” which is more general. 138 T.C. at 50.
PLR-113981-25 12 designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved”; and (C) the substantial structural modification test, which requires that the chassis “could not, without substantial structural modification, be used as a component of a vehicle” designed to transport any load other than the particular machinery or equipment (or similar machinery or equipment) for which it was specially designed.
Vehicle 1 does not meet the permanent mount test under § 4053(8)(A). Component 1 has a hydraulic mechanism and could be considered machinery or equipment. The operation of Component 1, at least in part, is unrelated to transportation. Rev. Rul. 79-239 concludes that the operation of military equipment at an off-highway site constitutes a “similar” operation to the enumerated jobsite operations in the permanent mount test.
However, Component 1 is also designed to transport Load 1 on primary and secondary roads, as well as off-highway. Component 1 thus performs both transportation and nontransportation functions. Further, Component 2 does not constitute machinery or equipment. Therefore, Vehicle 1 fails the permanent mount test.
Even if the Service were to find Vehicle 1 meets the permanent mount test, Vehicle 1 does not meet the other requirements for the mobile machinery exemption.
Vehicle 1 does not meet the special design test under § 4053(8)(B). The chassis of Vehicle 1 transports Load 1 and Load 2, utilizing Component 1 and Component 2, respectively. Component 2 is not machinery or equipment. Therefore, the chassis of Vehicle 1 does not serve only as a mobile carriage and mount for permanently mounted machinery or equipment. Further, the chassis of Vehicle 1 has a pintle hook, and Vehicle 1 tows Trailer 1 and transports Trailer 1 Load (and is capable of towing a different trailer). Florida Power & Light held that vehicles with a pintle hook attached to the chassis did not meet the special design test because the chassis was not designed to transport only the attached machinery or equipment but also to tow trailers and transport trailer loads. 375 F.3d at 1123. Rev. Rul. 79-239 is distinguishable because the undercarriage at issue served only as a mobile carriage for the military antenna unit bolted onto it. Because Vehicle 1’s chassis can transport Load 1, Load 2, and Trailer 1 Load, and can tow a different trailer, the chassis of Vehicle 1 has not been specially designed to serve only as a mobile carriage and mount for Component 1.
Vehicle 1 does not meet the substantial structural modification test under § 4053(8)(C).
The Vehicle 1 chassis can transport Load 1, Load 2, and Trailer 1 Load. Further, the pintle hook allows the Vehicle 1 chassis to tow other loads. Accordingly, the Vehicle 1 chassis does not require substantial structural modification to be used as a component of a vehicle designed to perform a function of transporting a load other than permanently mounted machinery or equipment.
It is immaterial that the State Department of Transportation determined Vehicle 1 was “special mobile equipment” under State law. That determination involved a fundamentally different evaluation than that in § 4053(8), and in any event, Vehicle 1’s PLR-113981-25 13 exemption from State registration and titling requirements is not a factor under § 4053(8).
Vehicle 1 fails all three tests. Therefore, Vehicle 1 does not qualify for the mobile machinery exemption under § 4053(8).
Vehicle 2
Off-highway vehicle exception
To qualify for the § 7701(a)(48)(A) off-highway vehicle exception, Vehicle 2 must meet both the special design test and the substantial impairment test, discussed above.
Vehicle 2 is not specially designed for the primary function of transporting a particular type of load. Vehicle 2 is designed to transport Load 3. However, Vehicle 2 is also designed to tow Trailer 2 and transport Trailer 2 Load. Thus, Vehicle 2 is not specially designed for the primary function of transporting Load 3 (or that particular type of load).
In addition, the Vehicle 2 chassis is equipped with a pintle hook that allows for a towing capacity of D pounds, which exceeds Trailer 2’s GVWR.8 Like the heavy-duty tractors in Myles Lorentz, Vehicle 2 can tow a trailer and trailer load other than Trailer 2 and Trailer 2 Load. Therefore, Vehicle 2 is not specially designed for the primary function of transporting Trailer 2 Load together with Load 3, or loads typified by these two loads.
See § 7701(a)(48)(A)(i); Myles Lorentz, 138 T.C. at 46 (“primary” means “of first importance” or “principally”). For purposes of the special design test, a vehicle’s design is determined solely on the basis of its physical characteristics. See § 7701(a)(48)(A)(ii). Therefore, it is immaterial that Vehicle 2 is not used and/or not intended to be used to transport other loads.
Taxpayer also has not shown that Vehicle 2 is specially designed for the primary function of off-highway transportation. The U.S. military requires that Vehicle 2 provide the ability to operate on primary, secondary, unimproved, and off-road locations. While the primary, secondary, and unimproved roads envisioned may be outside of the United States, when applying the special design test, a vehicle’s design is determined solely on the basis of its physical characteristics. See § 7701(a)(48)(A)(ii). Vehicle 2 has physical features that allow it to transport its loads off-highway, and other features that provide the capability to transport its loads on public highways. Vehicle 2 can travel over 25 miles per hour; has DOT-compliant components such as headlights, reflective striping, windshield wipers, and turn signals; and has public-highway features like antilock braking systems and traction control. See Rockwater, 121 F.4th 1287. Like the military vehicles in Rev. Rul. 79-296, and the heavy-duty tractors in Myles Lorentz, Vehicle 2 is not specially designed for the primary function of transporting a load offhighway. See also Myles Lorentz, 138 T.C. at 46 (discussing meaning of “primary”).
Similar to the Rockwater plaintiff’s marketing of its peanut-drying trailers as safe for 8 Trailer 2’s GVWR falls below the threshold for taxation. See § 4051(a)(3).
PLR-113981-25 14 transport over public roads, Taxpayer, by contracting to construct Vehicle 2 to the U.S. military’s specifications, must ensure that Vehicle 2 has the ability to operate on primary and secondary roads. Therefore, Vehicle 2 does not meet the special design test in § 7701(a)(48)(A)(i).
Vehicle 2 also does not meet the substantial impairment test in § 7701(a)(48)(A)(i) because Vehicle 2’s capability to transport a load over the public highway is not substantially limited or impaired. Taxpayer does not assert that Vehicle 2 is oversize or overweight, and the vehicle has DOT-compliant features for on-road use. Vehicle 2 can maintain an average speed of over 25 miles per hour while transporting a load. See § 7701(a)(48)(A)(iii). Vehicle 2 is subject to limitations with respect to its operations in densely populated areas, but such restrictions are operations-based and are not due to the vehicle’s design for purposes of carrying Load 3. See § 7701(a)(48)(A)(i) (impairment must be “because of” a vehicle’s special design). Vehicle 2 can be driven on public roads. Further, Taxpayer has not shown that Vehicle 2’s capability to transport a load on the public highway is substantially impaired.
Like the vehicles in Rockwater and in Myles Lorentz, Vehicle 2 can be driven on the public highway and is not oversize or overweight. Rev. Rul. 79-296 held military vehicles to be highway vehicles even though they required special permits or escort vehicles to drive on the public highway due to their size.9 Unlike the vehicles at issue in
Rev. Rul. 79-296, Vehicle 2 does not require special permits or escort vehicles to drive on the public highway due to its design. Even if the operations-based restriction were considered a design-based impairment, Vehicle 2 need only be capable of transporting “a load” over the public highway without substantial impairment, not necessarily its intended loads. See § 7701(a)(48)(A)(i).
The State Department of Transportation determined that Vehicle 2 is exempt from State registration and titling requirements as “special mobile equipment” under State law.
However, Vehicle 2 is generally still subject to other State law requirements relating to motor vehicles. The exemption from State registration and titling requirements is outweighed by other factors for purposes of the substantial impairment test in § 7701(a)(48)(A)(i).
Vehicle 2 fails both the special design test and the substantial impairment test.
Therefore, Vehicle 2 does not qualify for the off-highway vehicle exception under § 7701(a)(48)(A).
Mobile Machinery Exemption
To qualify for the mobile machinery exemption to the § 4051 tax, Vehicle 2 must meet all three requirements in § 4053(8), the permanent mount test, the special design test, and the substantial structural modification test, discussed above.
9 See footnote 7.
PLR-113981-25 15
Vehicle 2 does not meet the permanent mount test under § 4053(8)(A). Component 3 does not constitute machinery or equipment. Accordingly, Vehicle 2 fails the permanent mount test.
Even if the Service were to find that Vehicle 2 meets the permanent mount test, Vehicle 2 does not meet the other requirements for the mobile machinery exemption.
Vehicle 2 does not meet the special design test under § 4053(8)(B). The chassis of Vehicle 2 transports Load 3. Therefore, the chassis of Vehicle 2 does not serve only as a mobile carriage and mount for permanently mounted machinery or equipment.
Further, the chassis of Vehicle 2 has a pintle hook, and Vehicle 2 tows Trailer 2 and transports Trailer 2 Load (and is capable of towing a different trailer). Florida Power & Light held that vehicles with a pintle hook attached to the chassis did not meet the special design test because the chassis was not designed to transport only the attached machinery or equipment but also to tow trailers and transport trailer loads. 375 F.3d at
1123. Rev. Rul. 79-239 is distinguishable because the undercarriage at issue served only as a mobile carriage for the military antenna unit bolted onto it. Vehicle 2’s chassis can transport Load 3 and Trailer 2 Load and can tow a different trailer. Accordingly, even if Component 3 were machinery or equipment, the chassis of Vehicle 2 would not be specially designed to serve only as a mobile carriage and mount for such hypothetical machinery or equipment.
Vehicle 2 does not meet the substantial structural modification test under § 4053(8)(C).
The Vehicle 2 chassis can transport Load 3 and Trailer 2 Load. Further, the pintle hook allows the Vehicle 2 chassis to tow other loads. Accordingly, the Vehicle 2 chassis does not require substantial modification to be used as a component of a vehicle designed to perform a function of transporting a load other than permanently mounted machinery or equipment.
It is immaterial that the State Department of Transportation determined Vehicle 2 was “special mobile equipment” under State law. That determination involved a fundamentally different evaluation than that in § 4053(8), and in any event, Vehicle 2’s exemption from State registration and titling requirements is not a factor under § 4053(8).
Vehicle 2 fails all three tests. Therefore, Vehicle 2 does not qualify for the mobile machinery exemption under § 4053(8).

# CONCLUSION

Vehicle 1 does not meet the requirements of the § 7701(a)(48)(A) off-highway vehicle exception or the requirements of the § 4053(8) mobile machinery exemption. Thus, the first retail sale of Vehicle 1 is subject to tax under § 4051.
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Vehicle 2 does not meet the requirements of the § 7701(a)(48)(A) off-highway vehicle exception or the requirements of the § 4053(8) mobile machinery exemption. Thus, the first retail sale of Vehicle 2 is subject to tax under § 4051.
Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. Specifically, this ruling does not opine on what constitutes the tax base for Vehicle 1 or Vehicle 2.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent.
The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.
In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.
Sincerely,
Jennifer Y. Golden
Senior Technician Reviewer, Branch 3
(Energy, Credits, and Excise Tax)
Enclosure
Copy for § 6110 Purposes
PLR-113981-25 17 cc:
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