Rockwater, Inc., dba Peerless Manufacturing Company v. United States

This statutory interpretation case raises the primary question as to the plain (best) meaning of 26 U.S.C. § 7701(a)(48)(A)(i) and, in the context of the federal excise tax scheme under 26 U.S.C. § 4051(a), raises these four interrelated issues regarding the test for applying that statutory exception:

1. What role does the ability of a vehicle to transport a load over the highway play in the statutory inquiry under 26 U.S.C. § 7701(a)(48)(A)(i)?

2. Does the two-prong test under 26 U.S.C. § 7701(a)(48)(A)(i) require comparison of the vehicle in question to a traditional highway vehicle to identify the special design features and impairments or limitations?

3. Whether the phrase “specially designed for the primary function of transporting a particular type of load other than over the public highway…” as used in 26 U.S.C. § 7701(a)(48)(A)(i) requires consideration of the design elements of the entire vehicle or just particular components of the vehicle?

4. Does the phrase “substantially limited or impaired” as used in 26 U.S.C. § 7701(a)(48)(A)(i) require consideration of all forms of impairment or limitation?