The opinion of the court was delivered by: Bua, District Judge.
The instant matter was brought by plaintiff, Northern
Illinois Gas Company (Ni-Gas), for a refund in the amount of
$483 in taxes paid. Defendant has countersued for $93,205.25
plus interest which it claims is still owing for tax
assessments made against plaintiff on August 30, 1977.
This Court has jurisdiction over the instant matter pursuant
to 28 U.S.C. § 1346(a)(1) and (c).
The issue in this case revolves around the validity of
certain Treasury Regulations and Revenue Rulings which
resulted in the plaintiff being taxed, pursuant to 26 U.S.C. § 4481(a),
at a higher rate than it contends is appropriate.
Under Revenue Ruling 76-294, trucks which are "equipped for use
in combinations" with twin-axle trailers or with single-axle
trailers which weigh in excess of 6,000 pounds are taxed at a
higher rate than trucks which tow single-axle trailers weighing
less than 6,000 pounds. Plaintiff contends that such a ruling
is invalid insofar as it ignores the "customary use" standard
set out in 26 U.S.C. § 4481 and 4482(b)(1) which, it is
argued, require the taxing body to consider not whether the
trucks are merely equipped for the heavier duty use, but
whether such vehicles are actually used in such a manner.
1. Plaintiff is a utility company incorporated in Illinois
and has its principal place of business in Aurora, Illinois.
2. During the years July 1, 1971 to June 30, 1972, July 1,
1972 to June 30, 1973, and July 1, 1973 to June 30, 1974,
plaintiff used certain highway motor vehicles, namely,
two-axled utility trucks having an unloaded weight of 10,100
pounds, for transporting personnel, tools, and equipment in
connection with its maintenance or installation of public
3. These trucks were equipped with a coupling device, known
as a "pintle hook," for pulling a trailer with two or more
axles or a one-axled trailer with a gross vehicle weight of
6,000 pounds or more.*fn2
4. Plaintiff filed Federal Highway Use Tax Returns (Form
2290) for the years in question. An audit of these returns
resulted in assessments in the sum of $93,684.28 being made
against plaintiff on August 30, 1977 due to a determination
that the trucks in question were "equipped for use in
combinations" and thus were taxable under 26 U.S.C. § 4481(a).
5. Notice of the assessments and demand for payment thereof
were duly given to plaintiff.
6. In September, 1977, plaintiff paid a portion of the
amount ($483.03), then filed a Claim for Refund (Form 843).
7. After being advised that its claim would be disallowed,
plaintiff filed a Waiver of Notice of Claim Disallowance (Form
2297) and subsequently instituted this action.
8. Defendant denies that plaintiff is entitled to a refund
and has counterclaimed for the balance of the amount assessed
against it ...