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Section 6421(e)(2)(A)(i) defines “off-highway business use” as
any use by a person in a trade or business other than as a fuel
in a highway vehicle “which (at the time of such use) is
registered, or is required to be registered, for highway use
under the laws of any State or foreign country”.
According to petitioner, the diesel fuel tax imposed under
section 4041(a)(1) is a “highway tax” and applies only to diesel
fuel consumed to propel a vehicle on the highway. Petitioner
argues that the credit here in dispute was calculated with
reference only to the amount of diesel fuel used to power the
loader, which in petitioner’s view constitutes “off-highway
business use” because loading and unloading the truck did not
take place on public roads or highways.2
Respondent points out that the truck was registered for
highway use during 1997 and was so used. Respondent also points
out that the same diesel engine that provides power to the loader
also propels the truck. According to respondent, the diesel fuel
allocated to the use of the loader does not constitute an “off-
highway business use” within the meaning of section
6421(e)(2)(A).
Respondent’s position is entirely consistent with (and
petitioner’s position is entirely contrary to) section 48.4041-7,
2 We accept petitioner’s testimony that no portion of the
claimed fuel tax credit amount was attributable to diesel fuel
consumed by the truck while driving on the highway.
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Last modified: May 25, 2011