Federal Excise Tax Information

IRS Reiterates Denial of Fuel Excise Tax Rebate for Single-Engine Sweepers

We previously published an article about how to garner a rebate on federal excise tax paid on fuel used by a sweeper. The article, by Internal Revenue Service agent, Kent Stoneking, laid out the criteria of how sweepers might qualify for the rebate. It also included information about how to keep track of and claim the federal excise tax rebate on diesel and gasoline fuel used by the sweeper's auxiliary engine.

Judging from the response we received, there are many contractors who still believe they can claim, or continue to claim, an excise tax rebate on fuel used in their single engine sweepers. The typical argument we heard was that "I know that such and such a percentage of the fuel I use is going to the sweeping function, so I should be able to claim a refund on that portion." Although it's hard not to agree, the fact is that the IRS rules read otherwise. No such rebate is available to contractors unless the sweeper is not required to be licensed as a motor vehicle.

To be on the safe side, we contacted the US Internal Revenue Service's Media Relations Office directly, in order to reconfirm the information we originally published by agent Stoneking. Unfortunately, at least for those who run single engine sweepers, the previous article, "Federal Tax Rebates: Do You Qualify?", was entirely correct.

After completely researching the issue from all angles, the IRS authorized us - in writing - to publish the following quote: "If a sweeper is a registered highway vehicle, all the fuel that runs through the engine to propel it is ineligible for the fuel tax rebate. In order for it to be eligible, the sweeper would have to either (1) not be a registered highway vehicle, or (2) have a separate engine for the sweeper function. Therefore, single engine sweepers that are registered as highway vehicles are ineligible for any type of federal excise tax rebate."

While we hope this sets the issue to rest once and for all, we do think it is one that might merit the attention of naPSA, or others, to attempt to institute a change. However, it seems clear that contractors who claim a federal excise tax rebate on any portion of the fuel used in their single engine sweepers are skating on ice that's very thin - and potentially quite expensive. The ruling effectively makes single-engine sweepers more costly to operate than those machines with a separate auxiliary engine to power the sweeper.

This article is reprinted from American Sweeper magazine, Volume 7 Number 2, 1999.

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