§4483 Exemptions

Summary

Some highway vehicles do not have to pay the use tax, and some can get partial or temporary relief. State governments and their local units are not taxed. The Treasury Secretary can exempt particular U.S. government vehicles or groups of vehicles if charging the tax would cause substantial burden or expense and the full benefit of the exemption goes to the United States. Transit buses (not intercity buses) are exempt if, for the last 3 months of the prior year (or another period the Secretary allows), they met the 60 percent passenger-fare revenue test as it existed the day before the Energy Tax Act of 1978. Vehicles listed in section 4053(8) are also exempt. Under rules the Secretary sets, tax collection can be suspended for vehicles expected to be driven less than 5,000 miles in a taxable period if the owner gives the required information. That suspension ends if the vehicle is driven more than 5,000 miles. If a suspended vehicle is transferred while the suspension is in effect, the old owner is not liable and the new owner is liable if the old owner provides the required transfer information. For agricultural vehicles, the mileage limit is 7,500 instead of 5,000. One-line meanings: “agricultural vehicle” — a highway vehicle used mainly for farming and registered as such; “farming purposes” — moving farm commodities to or from a farm or using them directly in production; “farm commodity” — things like crops, feed, seed, fertilizer, livestock, bees, poultry, fur-bearing animals, or wildlife. The tax is reduced by 25 percent for a vehicle used only to carry harvested forest products to or from a forested site and registered for that use. Qualified blood-collector vehicles used by qualified blood-collector organizations are exempt if at least 80 percent of the vehicle’s prior use was for collecting, storing, or transporting blood; a new vehicle counts if the organization certifies it expects at least 80 percent blood-related use. The parts that exempt states/local governments and the transit-bus rule stop applying on and after October 1, 2029.