Transportation for Hire: Truck Exemption Disallowed Due to Lack of Evidence

In Arcaro v. Testa, Ohio BTA Dkt. No. 2014-432 (10/22/2014), the Ohio BTA affirmed the Tax Commissioner’s determination that denied the objections to a use tax assessment based on the taxpayer’s untaxed purchase of a 2013 truck. The taxpayer argued the purchase was exempt from payment of use tax based on R.C. 5739.02(B)(32), which provides exemption from excise tax on motor vehicles primarily used for transporting personal property belonging to others by a person engaged in highway transportation for hire.

The Tax Commissioner found that at the time of the vehicle purchase, the taxpayer’s U.S. D.O.T. code only allowed him to haul private property. The taxpayer did change the classification, which the Tax Commissioner took note of. The main issue, however, was that there was insufficient evidence that the taxpayer used the 2013 Ford truck primarily for an exempt purpose. Taxpayer presented letters from customers describing the nature of their business with taxpayer. Some of these statements showed that the taxpayer was involved in the transportation of waste, including construction debris, which is a taxable purpose. For the exemption under R.C. 5739.02(B)(32) to apply, it must be fully supported.

As a result, the BTA affirmed the Tax Commissioner’s final determination, finding insufficient evidence in the record to establish that the truck was used for an exempt purpose.

If you have any questions regarding the application of the transportation for hire exemption to your situation, contact Steve Dimengo, Rich Fry, or Casey Davis.

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