§ 41.4481-1T - Special rules for small owner-operators (temporary).

(a) In general. In the case of a small owner-operator (as defined in paragraph (b) of this section), the tax imposed by section 4481(a) for the taxable period beginning July 1, 1984, and ending June 30, 1985, is:

(1) For vehicles with a taxable gross weight under 55,000 pounds—no tax,

(2) For vehicles with a taxable gross weight of at least 55,000 pounds but not over 58,000 pounds—the amount determined by using the rate of tax set forth in paragraph (b) of § 41.4481-1T, and

(3) For vehicles with a taxable gross weight over 58,000 pounds—$3.00 for each 1,000 pounds (or fraction thereof) of taxable gross weight, but not to exceed $550.

If the first taxable use of a particular highway motor vehicle subject to tax under this section is made after the end of the first month of the taxable period, or if a particular highway motor vehicle subject to tax under this section is destroyed or stolen before the first day of the last month in the taxable period, the tax shall be computed using the proration rules provided in §§ 41.4481-1T(c) (2) and (3), respectively. The tax imposed by section 4481(a) on a small owner-operator for taxable periods beginning after June 30, 1985, is the amount determined by using the rate of tax set forth in paragraph (b) of § 41.4481-1T.

(b) Small owner-operator. For purposes of this section, the term “small owner-operator” means any person who at all times during the taxable period owns no more than 5 highway motor vehicles with respect to which a tax is imposed by section 4481(a) for such taxable period and operates no more than 5 highway motor vehicles with respect to which a tax is imposed by section 4481(a) for such taxable period. For purposes of the preceding sentence, a vehicle on which the tax has been suspended under § 41.4483-2T(a) shall be considered a vehicle with respect to which a tax is imposed by section 4481(a). A person may qualify as a small owner-operator under this section with respect to vehicles which such person owns and operates, notwithstanding the fact that such vehicles are registered or are required to be registered in the name of another person. Such other person who has registered or is required to register the vehicles, but who does not own or operate the vehicles, will be entitled to compute tax under § 41.4481-1aT, to the extent the vehicles are owned and operated by small owner-operators. See Example (5) of paragraph (f) of this section. In the case of a lease of a vehicle, the lessor is treated as the owner and the lessee is treated as the operator of such vehicle.

(c) Aggregation of vehicle ownerships. For purposes of paragraph (b) of this section all highway motor vehicles upon which the tax under section 4481(a) is imposed which are owned or operated by:

(1) Any trades or businesses (whether or not incorporated) which are under common control with a taxpayer (as defined in § 1.52-1(b)), or

(2) Any member of any controlled group of corporations of which a taxpayer is a member, for any taxable period,

shall be treated as being owned or operated by such taxpayer during such taxable period.

(d) Controlled groups of corporations. For purposes of paragraph (c)(2) of this section the term “controlled group of corporations” has the same meaning assigned to it in section 1563(a), except that:

(1) “More than 50 percent” shall be substituted for “at least 80 percent” each place it appears in section 1563(a)(1), and

(2) The determination shall be made without regard to sections 1563(a)(4) and 1563(e)(3)(C).

(e) Highway motor vehicle. For purposes of this section, the term “highway motor vehicle” has the same meaning assigned to such term in section 4482(a) and the regulations thereunder.

(f) Examples. The application of this section may be illustrated by the following examples:

Example (1).

On July 1, 1984, Z is the owner and operator of 5 highway motor vehicles each of which has a taxable gross weight of 60,000 pounds. On July 5, 1984, Z leases an additional 2 highway motor vehicles with a taxable gross weight of 60,000 pounds for use in Z's trucking business. Even though Z only owns 5 highway motor vehicles with respect to which a tax is imposed under section 4481(a), Z is operating a total of 7 such vehicles. Therefore, Z does not qualify as a small owner-operator under this section.

Example (2).

On July 1, 1984, X is the owner and operator of 5 highway motor vehicles each of which has a taxable gross weight in excess of 58,000 pounds as determined under the schedules set forth in § 41.4482(b)-1T. X pays tax on these vehicles under section 4481 as provided in paragraph (a)(3) of this section. A new vehicle weighting 60,000 pounds is added to X's operating fleet in October 1984. X's small owner-operator status ceases upon the addition of the 6th vehicle to X's fleet and additional tax liability is incurred at such time in an amount equal to the excess of the tax which would have been imposed on the original 5 vehicles under § 41.4481-1T(b) for the entire taxable period over the tax X paid for these vehicles under paragraph (a)(3) of this section. Tax liability for the 6th vehicle is determined under the rate set forth in § 41.4481-1T(b) for the period from October 1, 1984, to June 30, 1985, under the proration rules in § 41.4481-1T(c)(2).

Example (3).

On July 1, 1984, Y is the owner and operator of 100 highway motor vehicles. For purposes of determining whether or not Y qualifies as a small owner-operator, the taxable gross weight of the vehicles is determined by reference to the schedules set forth in § 41.4482(b)-1T. Ninety-seven of the vehicles have a taxable gross weight of less than 55,000 pounds. Three of the vehicles have a taxable gross weight of 60,000 pounds. Thus, Y is the owner and operator of a fleet of 5 or fewer vehicles subject to tax under section 4481(a) and is a small owner-operator. The tax imposed by section 4481(a) is applied by determining the rate of tax under paragraph (a) of this section. Thus, for the taxable period July 1, 1984, through June 30, 1985, Y is liable for no tax on the vehicles weighing less than 55,000 pounds, and $540 ($180×3) of tax on the vehicles weighing 60,000 pounds.

Example (4).

Assume the same facts as in Example (3), except that on January 1, 1985, Y buys three highway motor vehicles each of which weighs 60,000 pounds. Y's small owner-operator status ceases upon the addition of the three vehicles to Y's fleet and Y must redetermine the tax on the vehicles using the rates in § 41.4481-1T(b). The redetermined tax on the original three vehicles weighing 60,000 pounds is $630 ($210×3). Since Y already paid $540 on these three vehicles, the additional amount to be paid is $90 (without interest). In addition, Y is liable for tax on the three added 60,000 pound vehicles for the period from January 1, 1985, through June 30, 1985, at the rates set forth in § 41.4481-1T(b). Thus, the tax due on these vehicles is $315 (6/12×[3×$210]). The total tax due from Y is $405, and must be paid with a Form 2290 filed by February 28, 1985.

Example (5).

Fleet carrier A has entered into operating agreements with 50 highway motor vehicle operators, each of which will provide services to A's shipping customers. None of the 50 operators are under common control with A or are members of a controlled group of corporations of which A is a member. Twenty of A's vehicle operators have purchased two truck-tractors (the “vehicles”) under conditional sales contracts with A while 10 vehicle operators purchased two vehicles under conditional sales agreements with other persons. All 30 of these operators are treated as owning their vehicles for Federal income tax purposes. The remaining 20 operators own outright two vehicles each. For purposes of determining the amount of tax imposed by section 4481(a), each owner of two vehicles is considered a small owner-operator. In the interest of administrative convenience, A registers all 100 of its fleet vehicles in its own name under the laws of A's home state and pays the tax imposed on these vehicles. A is reimbursed by the operators for registration fees and taxes paid. Since A neither owns nor operates the 100 vehicles which are owned and operated by the small owner-operators, A pays the tax under section 4481(a) based on the rate applicable to small owner-operators.

Example (6).

Assume the same facts as in Example (5), except that ten of A's vehicle operators have leased two vehicles each from A, rather than purchasing the vehicles under conditional sales contracts. As to these twenty leased vehicles, A is treated as the owner of the vehicles and cannot compute tax under section 4481(a) for these vehicles based on the rate applicable to small owner-operators, but must instead compute the tax based on the rate set forth in § 41.4481-1T(b). A is still eligible to compute tax under section 4481(a) on the other 80 vehicles based on the rate applicable to small owner-operators because these vehicles are owned and operated by small owner-operators.

Example (7).

P is a corporation which owns more than 50 percent of the single outstanding class of stock of three corporations, X, Y and Z. X Corporation operates and has registered in its name two highway motor vehicles, each of which has a taxable gross weight in excess of 55,000 pounds. Y and Z Corporations operate and have registered in their names three and two vehicles, respectively, each of which has a taxable gross weight in excess of 55,000 pounds. For purposes of paragraph (c)(2) of this section, Corporations P, X, Y, and Z are treated as members of a “controlled group of corporations” as that term is defined in § 41.4481-1aT(d). Thus, although each corporation pays the Federal Highway Use Tax on its vehicles separately from the other corporations, ownership and operation of their vehicles must be aggregated and none of the corporations qualify as a small owner-operator under this section. Accordingly, each corporation shall furnish such information as is required on the first Form 2290 filed for the taxable period and determine its tax liability under the rates set forth in § 41.4481-1T(b).

(Secs. 4051(d)(2)(B)(ii) (98 Stat. 1009; 26 U.S.C. 4051(d)(2)(B)(ii), 4483(d) (96 Stat. 2178; 26 U.S.C. 4483(d)), and 7805 (68A Stat. 917; 26 U.S.C. 7805) of the Internal Revenue Code of 1954)