Pacific Gas and Elec. Co. v. U.S., 80-4132
| Decision Date | 28 December 1981 |
| Docket Number | No. 80-4132,80-4132 |
| Parties | 82-1 USTC P 16,376 PACIFIC GAS AND ELECTRIC COMPANY, a corporation, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Shirley Woo, San Francisco, Cal., for plaintiff-appellant.
Melvin E. Clark, Jr., Washington, D. C., argued, for defendant-appellee; M. Carr Ferguson, Washington, D. C., on brief.
Appeal from the United States District Court for the Northern District of California.
Before TANG and FERGUSON, Circuit Judges, and KELLAM *, Senior District Judge.
Pacific Gas and Electric Company (Pacific) instituted this action seeking a refund of highway use taxes paid under protest for the periods September 1, 1972, through June 30, 1976. After a response by the United States, each party submitted a motion for summary judgment. Based on the presence of pintle hooks on the motor vehicles of Pacific the Internal Revenue Service determined that the taxpayer's trucks should be treated as truck-trailer combinations rather than as single unit vehicles in computing the taxable gross weight for highway tax purposes. The district court agreed and granted summary judgment.
Pacific is a public utility company providing gas and electric service to the public in parts of California. In the operation of its facilities, it utilizes various types of trucks and other equipment in the construction, operation and maintenance of its utility system. Similar type trucks are used throughout the industry, and by other persons. Certain described vehicles are subject to a tax imposed on highway motor vehicles pursuant to 26 U.S.C. § 4481. The designation and application of the classification of such vehicles is the subject of this action.
In 1957, the Internal Revenue Service decided that a utility truck designated for transportation of personnel, tools and equipment and equipped with a pintle hook would be considered a single unit for purposes of determining its taxable gross weight for Federal Highway Use Tax purposes. Revenue Ruling 57-547, 1957-2 C.B. 789. In that ruling, it was recognized that utility trucks equipped with pintle hooks sometimes pulled lightweight trailers such as pole or pipe dollies and tool or equipment trailers. Even so, such trucks were classified as single units for Highway Use Tax purposes, and such vehicles were so taxed for a number of years.
In 1976, the IRS issued Revenue Ruling 76-294, 1976-2 C.B. 364 changing and modifying the prior 1957 ruling. In the 1976 ruling, the IRS took the position that trucks used by utilities which were equipped with heavy pintle 1 hooks were to be taxed as truck-trailer combinations rather than as single units as before. The ruling provided that light trailers with gross vehicle weights below 6,000 pounds do not form a combination with a truck within the aforesaid section 4482. But trucks owned by the utility equipped with pintle hooks capable of towing trailers with gross vehicle weights of over 6,000 pounds (heavy trailer) were to be taxed as truck-trailer combinations, without regard to whether that type of truck was customarily used with heavy trailers. Heavy trailers are referred to as trailers with two or more axles, or a one axle trailer with a gross weight of 6,000 pounds or more.
Based solely on the presence of pintle hooks, IRS determined that the trucks of Pacific should be classified and taxed as truck-trailer combinations, rather than as single unit vehicles.
Section 4481(a), the section in question, imposes a tax on the use of any highway motor vehicle "which (together with the semitrailers and trailers customarily used in connection with highway motor vehicles of the same type as such highway motor vehicle) has a taxable gross weight of more than 26,000 pounds ...." 26 U.S.C. § 4481(a). 2 Section 4482(b) defines taxable gross weight thusly-
(1) the actual unloaded weight of-
(A) such highway motor vehicle fully equipped for service; and
(B) the semitrailers or trailers (fully equipped for service) customarily used in connection with highway motor vehicles of the same type as such highway motor vehicle; and
(2) the weight of the maximum load customarily carried on highway motor vehicles of the same type ... and on the semitrailers and trailers referred to in paragraph (1)(B).
Section 4482(b) gives the Secretary authority to determine taxable gross weight under regulations prescribed by the Secretary which may include formulas or other methods for determining the taxable gross weight of vehicles by classes, specifications, or otherwise.
Pursuant to the provisions of the statute IRS established three main classifications of trucks for application of the tax-(1) single unit vehicles, (2) tractor-trailer combinations, and (3) truck-trailer combinations. 26 C.F.R. Section 41.4482(b)-1(d).
Under the regulations trucks not equipped to tow a trailer of the type that forms a combination are treated as single units. But trucks regarded as equipped for use as combinations-a truck equipped with a heavy pintle hook-are categorized as truck-trailer combination vehicles under the regulations, regardless of whether these types of vehicles are customarily used in combination with such trailers. Such interpretation is inconsistent with the unambiguous provisions of the statute. Section 4482 specifically provides that the tax will be imposed on the motor vehicle when it is one of the type customarily used in connection with a trailer or semitrailer and having the requisite weight. Section 4481 imposes a tax on "any highway motor vehicle which (together with the semitrailers and trailers customarily used in connection with highway motor vehicles of the same type as such highway motor vehicle) has a taxable gross weight of more than 26,000 pounds ...." (Underscoring added). The same customary use standard is repeated in Treasury Regulation Section 41.4482(a)-1(b) and 41.4482(b)-1(a). Section 41.4482(a)-1(b) of the...
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