Thompson Truck & Trailer, Inc. Plaintiff- Appellant
United States of America Defendant-Appellee
Submitted: June 12, 2018
from United States District Court for the Northern District
of Iowa - Cedar Rapids
WOLLMAN, ARNOLD, and STRAS, Circuit Judges.
WOLLMAN, Circuit Judge.
Truck & Trailer, Inc. (Thompson), appeals the dismissal
of its complaint, arguing that the district
court erred in interpreting 26 U.S.C. §
4051(a)(1). We affirm.
is a semitruck dealership, whose principal offices are
located in Cedar Rapids, Iowa. Thompson sells trucks equipped
with diesel particulate filters (filters). The filters
collect particulate matter from a truck's exhaust and
turn it into a less harmful substance. Each filter increases
a truck's retail sales price by approximately $8, 000.
Under Internal Revenue Code § 4051(a)(1), Thompson must
pay a twelve percent excise tax on the trucks it sells. From
April 1, 2011, to September 30, 2011, Thompson paid the
excise tax on the full retail sales price of each truck sold,
which included tax on the $8, 000 value of each filter. On
July 30, 2014, Thompson sought a refund of $387, 840 from the
Internal Revenue Service, arguing that-based on its
interpretation of a federal regulation-the filters should not
have been taxed. The Internal Revenue Service denied
review "de novo the grant of a motion to
dismiss, taking all facts alleged in the complaint as
true." Owen v. Gen. Motors Corp., 533 F.3d 913,
918 (8th Cir. 2008). We also review de novo the
district court's interpretation of a statute. In re
Racing Servs., Inc., 779 F.3d 498, 502 (8th Cir. 2015).
argues that the district court erred in its application of
Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984). When conducting a
Chevron-based review of an agency's construction
of a statute, we consider two questions: (1) "whether
Congress has 'directly addressed the precise question at
issue, '" and (2) if Congress has not directly
addressed the question at issue, whether the agency's
rule is "arbitrary or capricious in substance, or
manifestly contrary to the statute." Mayo Found. for
Med. Educ. & Research v. United States, 562 U.S. 44,
52-53 (2011) (quoting Chevron, 467 U.S. at 842-43;
Household Credit Servs., Inc. v. Pfennig, 541 U.S.
232, 242 (2004)).
argues that the district court erred at step one of the
Chevron analysis by concluding that under 26 U.S.C.
§ 4051(a)(1) Congress had directly addressed the precise
question at issue-whether the filters qualified as a
"part or accessory." The text of § 4051
Imposition of tax.-
(1) In general.-There is hereby imposed on
the first retail sale of the following articles (including in
each case parts or accessories sold on or in connection
therewith or with the sale thereof) a tax of 12 percent of
the amount for which the article is so sold:
(A) Automobile truck chassis.
(B) Automobile truck bodies.
(C) Truck trailer and semitrailer chassis.