Off-Highway Fuel Use Credits — IRS Offers Stationary Shelter Exception

Article

Mobile medical units or construction office trailers may qualify businesses for off-highway fuel use credits, reducing tax burdens and saving money.

3 minute read

July 31, 2025

Leanne Sobel

Partner-in-Charge, Energy Compliance Services - Motor Fuels and Excise Tax

Never miss a thing.

Mobile Construction Office Sitting in a Parking Lot with Stairs Leading up to it

A little-known provision in the tax code could open the door to significant financial benefits for businesses using trailers or semitrailers that operate off-highway. Thanks to an IRS exception that treats these units as stationary shelters for off-highway use, businesses that rely on mobile medical units or construction office trailers may qualify for off-highway fuel use credits or refunds. This exception allows for a reduction of fuel tax burdens, offering potential savings that can be reinvested into your operations.

Understanding the Criteria for Off-Highway Classification

If a vehicle does not qualify as mobile machinery specially designed for nontransportation functions and it is not specifically designed for off-highway transportation, then it may still be considered off-highway if it is a nontransportation trailer or semitrailer. A trailer or semitrailer shall not be treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter carrying on an off-highway function at an off-highway site (IRC Sec. 7701(a)(48)(B)).

IRS Letter Ruling 20082703 – Mobile Medical Trailers

The IRS found mobile medical trailers qualify under this exception. Mobile medical trailers include cardiac cauterization laboratory unit, mammography units, mobile magnetic resonance imaging units and computerized tomography units. The mobile medical trailers are transported on a highway to off-highway sites. The mobile medical trailers are custom designed and cannot be used as standalone units. They are designed to use only at sites specifically prepared to accommodate the designs and functions of the trailer. Because the mobile medical trailer is specially designed to only function as an enclosed stationary shelter for an off-highway function at an off-highway site, the medical trailer would not be considered an on-highway vehicle.

A trailer capable of functioning as an office at an off-highway construction site is another example of the nontransportation trailer and semi-trailer exception.

This enclosed stationary shelter exception offers refund and credit opportunities for medical and construction companies. Weaver can help eligible businesses navigate the process. Contact us today.

Authored by Kelly Grace and Leanne Sobel

Off-Highway Fuel Credits and Refunds Series

Our series explores off-highway fuel credits and refunds, covering key topics like navigating IRS rules, how different states handle these credits and tips for substantiating off-road claims. Whether you’re aiming to maximize tax benefits or ensure compliance with regulations, this series will provide the guidance you need.

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