Lucine Williams - Page 6

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          number of gallons of gasoline or diesel fuel purchased in 1991               
          for use in the dump truck.                                                   
               It is clear from petitioner’s testimony that he drove his               
          dump truck on the highway from its storage yard to various                   
          project sites for which he had hauling contracts.  He also would             
          haul materials from the project sites to other locations,                    
          provided such destinations were within a 50-mile radius.  In so              
          doing, petitioner used public highways.  He has failed to prove              
          that the dump truck was not a highway vehicle, or that it was not            
          registered or required to be registered for highway use.3                    

          3  See sec. 48.4061(a)-1(d)(1), Manufacturers & Retailers                    
          Excise Tax Regs., for a definition of "highway vehicle" and its              
          use.  See also sec. 48.6421-4(b) of the regulations with respect             
          to the meaning of "qualified business use" for claiming the fuel             
          tax credit, and particularly subparagraph (5) which contains the             
          following example illustrating its application:                              
               M corporation, a logging company, files its income tax                  
               return on the basis of the calendar year.  During 1982, the             
               company used 20,000 gallons of gasoline in its logging                  
               business.  Of this amount, 12,000 gallons were used as fuel             
               in registered highway vehicles which were operated both on              
               the public highways and on the company's private roads.  Of             
               the remaining 8,000 gallons, 6,000 were used in nonhighway              
               vehicles, such as tractors and bulldozers, and 2,000 gallons            
               were used in highway vehicles such as heavy trucks which, at            
               the time of use, were neither registered nor required to be             
               registered under state law for highway use by reason of                 
               being operated entirely on the company's property.  As the              
               ultimate purchaser, M may take a credit on its income tax               
               return for 1982 under this section in respect of the 6,000              
               gallons used in the nonhighway vehicles and the 2,000                   
               gallons used in the unregistered highway vehicles.  However,            
               no credit may be allowed with respect to the 12,000 gallons             
               used in the registered highway vehicles even though a                   
               portion of this gasoline was used in operating the vehicles             
                                                              (continued...)           




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