U.S. industry coalition defeats IRS attempt to deny 25% exemption in Heavy Vehicle Use Tax for log trucks

Audrey Dixon

ROCKVILLE, Maryland , December 9, 2009 (press release) – A coalition of allied associations (American Loggers Council (ALC); North Carolina Association of Professional Loggers; South Carolina Timber Producers Association; Virginia Loggers Association; Virginia Forest Products Association; and Forest Resources Association (FRA)) has defeated an Internal Revenue Service attempt to deny the 25% exemption in Heavy Vehicle Use Tax (HVUT) for log trucks.

A December 7 IRS Legal Memorandum confirms a less formal finding the agency published this summer.

ALC’s Danny Dructor and FRA’s Richard Lewis issued a joint statement noting “This is a prime example of how the forestry and logging association community is prepared to take cooperative, quick, and decisive action when its members are treated unfairly or materially harmed.”

In 1984 FRA worked with Ed Ehlers, the former Executive Director of the Associated California Loggers, and other state logging associations to achieve a 25% reduction in the Heavy Vehicle Use Tax for log trucks. This reduction was enacted into law because the forestry and logging association community was collectively able to convince Congress that log and pulpwood trucks travel unloaded more than 50% of the time. The original legislation asked Congress for a 50% HVUT reduction, but this number was changed to 25% in the House-Senate Conference Committee.

In 2008, IRS agents started denying the 25% HVUT reduction to log trucking firms in South Carolina and Virginia, and the Agency was set to expand its activities into North Carolina. Initially FRA started work on this issue by contacting senior staff in the Department of Treasury National Office. ALC and the state logging associations tackled the issue by contacting the IRS Taxpayer Advocacy Service. All of the associations soon joined forces, concentrated joint efforts working through the IRS Taxpayer Advocacy Service, and won the case with the IRS.

Those logging firms that had been denied the 25% reduction in HVUT have been counseled to file for refunds for assessments and penalties. In some cases these refunds exceed $30,000.

Regional forestry and logging issues often quickly become national issues. By bringing these issues to the attention of your state and national trade associations, they can often be circumvented before they get out of control. Please continue to report unusual tax or other government agency activities to your state, regional, and national associations. These associations exist to serve your needs.

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