Definition of Commercial Motor Vehicle as it Relates to the Highway Use Tax on Trailers

February 19, 1996

Ms. Carol Howard Director, Registration Section

N.C. Division of Motor Vehicles 1100 New Bern Avenue Raleigh, N.C. 27697

RE: Advisory Opinion: The Definition Of Commercial Motor Vehicle As It Relates To The Highway Use Tax On Trailers Under G.S. § 105-187.3; G.S. § 20-4.01.

Dear Ms. Howard:

This is in response to your request for an advisory opinion regarding the definition of commercial motor vehicle as it relates to the collection of the North Carolina Highway Use Tax by the Commissioner of Motor Vehicles pursuant to G.S. § 105.187.3. Specifically, you asked whether trailers should be considered commercial motor vehicles as provided in G.S. § 105187.3(a).

G.S. § 105-187.3 states that the highway use tax is imposed at the rate of three percent (3%) of the retail value of a motor vehicle for which a certificate of title is issued. It provides for a maximum tax of $1,000.00 "for each certificate of title issued for a Class A or Class B motor vehicle that is a commercial motor vehicle, as defined in G.S. 20-4.01." (Emphasis added.) The maximum tax for each certificate of title issued for any other motor vehicle is $1,500.00. G.S. § 105-187.3(a) (1995).

Class A and Class B motor vehicles are defined in G.S. § 20-4.01 as follows:

(2a) Class A Motor Vehicle.–A combination of motor vehicles that meets either of the following descriptions:

a.: Has a combined GVWR of at least 26,001 pounds and includes as part of the
combination a towed unit that has a GVWR of at least 10,001 pounds.
b.: Has a combined GVWR of less than 26,001 pounds and includes as part of the
combination a towed unit that has a GVWR of at least 10,001 pounds.
(2b) Class B. Motor Vehicle.–Any of the following: a. A single motor vehicle that
has a GVWR of at least 26,001 pounds.
b.: A combination of motor vehicles that includes as part of the combination a towing
unit that has a GVWR of at least 26,001 pounds and a towed unit that has a GVWR of
less than 10,001 pounds.

G.S. § 20-4.01(2a) and (2b) (1995).

The definition of commercial motor vehicle as stated in G.S. § 20-4.01(3d) includes vehicles that are not Class A or Class B motor vehicles. That definition reads as follows:

(3d) Commercial Motor Vehicle.–Any of the following motor vehicles that are designed or used to transport passengers or property:

a.: A Class A motor vehicle that has a combined GVWR of at least 26,001 pounds and includes a part of the combination a towed unit that has a GVWR of at least 10,001 pounds.
b.: A Class B motor vehicle.

d. Any other motor vehicle included by federal regulation in the definition of commercial motor vehicle pursuant to 49 U.S.C. Appdx. § 2716.

G.S. § 20-4.01(3d) (1995).

In order to qualify for the $1,000.00 maximum tax, a vehicle must meet the criteria for a Class A or Class B motor vehicle as defined by G.S. § 20-4.01(2a) or (2b), and in addition it must be a commercial motor vehicle as defined by G.S. § 20-4.01(3d).

Applying the above definitions to the highway use tax provisions of G.S. § 105-187.3(a), we conclude that certificates of title issued for trailers that meet any of the following descriptions are entitled to the $1,000.00 maximum highway use tax:

1. A trailer is a Class A commercial motor vehicle if:

a.: It has a GVWR of at least 10,001 pounds;
b.: It is being titled contemporaneously with a towing unit;
c.: It is intended to be towed in combination with the towing unit; and
d.: The GVWR of the combination of the trailer and the towing unit is at least 26,001 pounds.

2. A trailer is a Class B commercial motor vehicle if:

a.: It is being titled alone; and
b.: It has a GVWR of at least 26,001 pounds.

3. A trailer is also a Class B commercial motor vehicle if:

a.: It has a GVWR of less than 10,001 pounds;
b.: It is being titled contemporaneously with a towing unit that has a GVWR of at least 26,001 pounds; and
c.: It is intended to be towed in combination with the towing unit that has a GVWR of at least 26,001 pounds.

Any trailer that does not meet one of the three descriptions above is neither a Class A nor a Class B commercial motor vehicle and is, therefore, subject to the $1,500.00 maximum highway use tax. A trailer that meets the definition of a commercial motor vehicle under federal regulation, but does not meet the definition of a Class A or Class B commercial motor vehicle under G.S. § 20-4.01(3d)a. or b., is not entitled to the $1,000.00 maximum tax.

Since the highway use tax applies to each certificate of title that is issued by the Division, the tax must be assessed separately for a trailer that is titled as part of a combination Class A or B commercial motor vehicle.

Reginald L. Watkins Senior Deputy Attorney General

Bryan E. Beatty

Assistant Attorney General

C. Norman Young Associate Attorney General