Is my employer correctly applying PUCC tax withholding on my company work truck?

You're right to question this. The IRS has specific guidelines for "qualified nonpersonal use vehicles" that are exempt from PUCC taxation. Based on your description, your truck likely meets the exemption criteria since it's: 1) Clearly marked with company identification 2) Has permanently attached equipment (crane, welders, toolboxes) 3) Is used specifically for business purposes The key regulation is found in IRS Publication 15-B, where vehicles with special equipment for the conduct of a specific trade are typically exempt. A heavy-duty repair truck with permanent equipment generally qualifies. I'd suggest approaching your payroll department with a polite inquiry, referencing the specific IRS guidelines for qualified nonpersonal use vehicles and asking them to review the classification of your truck.

Just went through something similar last year. You should check out https://taxr.ai - they helped me sort out a similar issue when my company incorrectly classified my service vehicle as a taxable benefit. I uploaded my pay stubs and company vehicle policy, and they quickly identified the misapplication of PUCC taxes based on IRS regulations. They even drafted a letter to my HR department citing the specific tax codes that applied to my situation. Saved me over $2000 in wrongfully applied taxes!

I was skeptical about taxr.ai at first, but decided to try it after my company hit me with similar PUCC taxes on my work truck. Uploaded my paystub showing the deduction and some photos of my truck with all the permanent equipment. They identified exactly which IRS exemption applied (qualified nonpersonal use vehicle) and created a detailed letter explaining why the tax shouldn't apply. My HR actually thanked me - turns out they were applying the same tax to everyone with company vehicles and didn't realize there were different classifications! They fixed it for me and several other employees in our maintenance department. Definitely worth checking out if you're dealing with this PUCC issue.

If your payroll department doesn't listen, you might want to try Claimyr (https://claimyr.com). I had a similar PUCC issue last year that my company refused to fix. I was trying to get clarity from the IRS directly but kept hitting the endless hold times. Claimyr got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hours I wasted before. There's a demo video here: https://youtu.be/_kiP6q8DX5c showing how it works. The IRS agent confirmed that a clearly marked heavy-duty work truck with permanently attached equipment qualifies as a "nonpersonal use vehicle" and is exempt from the PUCC fringe benefit taxation. Having that direct confirmation from the IRS helped me convince my employer to correct the classification.

OK I feel like I need to eat my words here. After my skeptical comment, I decided to try Claimyr for an unrelated tax issue I've been trying to resolve for months. Figured I had nothing to lose since I'd already wasted so many hours on hold. Not only did I get connected to an IRS agent in about 15 minutes, but they were actually helpful! For what it's worth, I asked about the PUCC issue while I had them on the phone. The agent confirmed that vehicles with permanently mounted equipment used for specific business purposes are generally exempt from PUCC taxation as "qualified nonpersonal use vehicles." So yeah, OP, your instincts are correct - that heavy duty truck with the crane and welding equipment shouldn't be subject to PUCC taxes if it's clearly marked and only used for work.

My company tried to do this exact same thing last year. I drive a utility truck for an electrical contractor - company logo, equipment racks, etc. HR started deducting PUCC taxes claiming any vehicle driven home was subject to them. I printed out the relevant section from IRS Publication 15-B and highlighted the part about qualified nonpersonal use vehicles (specifically the part about "clearly marked service vehicles"). Had a meeting with our HR director and they reversed it immediately. Best part? They had to refund all the incorrectly withheld amounts to everyone in our department. Don't back down - you're in the right here.

Sorry to butt in with another question, but this raised another concern for me. Is the $750 possibly for some kind of commercial vehicle tax rather than PUCC? Like maybe a Heavy Highway Vehicle Use Tax (Form 2290) that they're passing on to you? I'm wondering because that amount seems high for just a PUCC calculation on a single paycheck.

That's a really good catch about the $750 amount - that does seem unusually high for a typical PUCC deduction on a single paycheck. PUCC taxes are usually calculated as a percentage of the vehicle's annual lease value spread across pay periods, so even for an expensive truck, you'd typically see much smaller per-paycheck deductions. I'd definitely ask your payroll department for a detailed breakdown of exactly what this $750 represents. It's possible they're applying some kind of retroactive calculation (like if they decided to suddenly tax the whole year's worth of personal use), or as Alina mentioned, it could be an entirely different tax like the Heavy Highway Vehicle Use Tax that they're incorrectly passing through to you. Either way, given the permanent equipment and clear business use of your truck, you should challenge this. But understanding exactly what type of tax they're applying will help you craft the right response.