[Congressional Record Volume 151, Number 6 (Wednesday, January 26, 2005)]
[Senate]
[Pages S591-S592]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENSIGN:
  S. 181. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for taxpayers owning certain commercial power 
takeoff vehicles; to the Committee on Finance.
  Mr. ENSIGN. Mr. President, I rise today to offer legislation to 
correct an inequity with the United States Tax Code that affects 
thousands of taxpayers every year. The bill I am offering is the Fuel 
Tax Equalization Credit for Substantial Power Takeoff Vehicles Act 
which will correct an injustice for owners of ready mixed concrete and 
sanitation trucks.
  Our Tax Code imposes a Federal tax on fuel sold for use in highway 
vehicles. This makes sense because vehicles that use our roads cause 
wear and tear. The money raised from the fuel tax goes directly into 
the Highway Trust Fund and is used for road repair and maintenance. The 
Code provides fuel tax exemption for ``off highway'' use so that fuel 
used by non-highway vehicles is not taxed. The principle is simple. 
Fuel used to move vehicles on our roads is taxed; fuel used for ``off-
road'' purposes is not.
  Mixed concrete and sanitation trucks are ``dual-use'' vehicles. In 
addition to consuming fuel for roadway travel, they use fuel for a 
secondary purpose such as turning the mixer drum or lifting a dumpster 
and compacting trash. This is known as a ``Power Takeoff Function.'' In 
the past, this function was performed by a second fuel-driven engine. 
But times have changed. Today, sanitation and cement trucks are more 
efficient and use one engine for both tasks. Today's vehicles create 
the situation where technology is in the fast lane but our tax system 
lags behind in the slow lane.
  The environment benefits with the use of one engine instead of two as 
a result of decreased fuel use and exhaust emissions. Using one engine 
reduces the truck's weight which means these trucks can haul more cargo 
without violating weight restrictions. This decreases the number of 
trips these trucks must take which results in less wear and tear on the 
roads.
  Until recently, owners of dual-use vehicles would estimate the amount 
of fuel taxes they paid for fuel related to off-road use and would 
claim a tax credit for that amount. The Tax Code does not recognize 
``dual-use'' vehicles but recent IRS regulations support the idea that 
the fuel tax did not apply to fuel used for non-highway purposes. 
Despite the regulations, the IRS argued in a recent tax court case that 
estimating fuel consumption was too difficult to administer. In other 
words, the IRS dismissed its own regulations. Unfortunately for 
taxpayers who own dual use vehicles, the tax court agreed with the 
IRS's position. This decision has had the effect of penalizing 
efficiency, conservation and good environmental practices.
  Mr. President, by establishing an annual $250.00 per vehicle tax 
credit my bill resolves this inequity. This legislation should not be 
seen as creating a new tax break. It restores tax fairness to owners of 
dual-use vehicles without resorting to an elaborate fuel measurement 
scheme that would create administrative difficulties. The amount of the 
tax credit is less than the estimated amount of fuel taxes paid for

[[Page S592]]

non-highway purposes for these vehicles. In order to receive this 
credit, a vehicle would have to be registered, licensed and insured in 
the vehicle owner's respective State. This is a measure that will 
simply restore fairness to a situation involving the fuel tax where 
Congress never intended the tax to apply in the first place.
                                 ______