Prime Is Suing the IRS for $11 Million Over Fuel Tax It Paid on Reefer Diesel. The Same Credit It Is Fighting For Is One Small Carriers Can Claim Too.

A reefer unit burns its own diesel. Anyone who runs refrigerated freight knows this, because they are paying for two fuel burns on every load: the diesel that moves the truck down the road, and the separate diesel that runs the refrigeration unit on the trailer keeping the freight cold. Both come out of the same pocket.

Only one of them is actually pushing the truck down the highway. Prime Inc. , the Springfield, Missouri carrier that runs roughly 9,000 trucks and is one of the largest refrigerated carriers in the country, has decided that the distinction is worth more than $11 million, and it is now making that case in federal court against the Internal Revenue Service.

Source: United States District Court, Western District of Missouri. The opening page of Prime’s federal complaint seeking an $11 million refund of fuel excise tax. The case, New Prime, Inc. v. United States, was filed June 16, 2026 in the U. S. District Court for the Western District of Missouri. What Prime Filed In a complaint filed June 16, 2026, in the U.

S. District Court for the Western District of Missouri, Prime petitioned the IRS for a refund of $11,016,644 in federal fuel excise tax that it paid between 2018 and 2021. The basis for the claim is specific and, on its face, straightforward.

Prime argues that the diesel used exclusively to power the refrigeration units on its trailers, fuel that never propelled a vehicle, constitutes an off-highway, nontaxable business use, and that taxing it as standard highway fuel was improper. The logic rests on what the federal fuel excise tax is actually for. That tax, currently 24.

3 cents per gallon on undyed diesel, exists to fund “highway infrastructure”. It is, in effect, a user fee for the roads. Fuel that runs a refrigeration unit on a trailer does not use the highway in that sense. It is burned to spin a compressor and keep a box cold, whether the truck is rolling down the interstate or parked at a dock overnight.

Prime’s position is that fuel doing that work was never highway fuel and should never have carried the highway tax. This is where technically, the point is very valid. This is not Prime’s first attempt to recover the money.

According to the complaint, Prime previously filed for refunds covering the periods ending March 31, 2018 through December 31, 2020, and the IRS denied all of those claims. Prime then filed an additional claim on September 12, 2025 covering 2021, and as of the complaint, it had received neither a refund nor a denial notice for that year.

Having exhausted the administrative route without success, Prime has moved the fight to federal court. In addition to the $11 million, it is seeking litigation costs, attorney fees, and prejudgment and post-judgment interest. The Part That Actually Matters for Small Carriers Here is what makes this more than a story about a big carrier and a big number.

The tax credit Prime is fighting over is not some exotic provision available only to fleets with 9,000 trucks and a legal department. It is a standard, established federal fuel tax credit, and it is available to any business burning taxed fuel for a nontaxable off-highway use, including the owner-operator pulling a single reefer.

The IRS Fuel Tax Credit covers the federal excise tax paid on undyed diesel that is used for a qualifying nontaxable purpose. Reefer fuel is one of the textbook examples.

So is fuel burned by auxiliary equipment that does not propel the truck, generators/APUs, certain power take-off (PTO) applications, and similar equipment that runs off diesel but never turns a drive wheel. The credit refunds the federal excise tax on that fuel, which is 24. 3 cents per gallon on undyed diesel and 18. 3 cents on gasoline.

Those rates are exactly the federal excise tax paid at the pump. Run the numbers on what that means for a reefer operation. A refrigeration unit can burn somewhere in the range of a half-gallon to a gallon of diesel per hour depending on the unit, the load, the ambient temperature, and how hard it is working.

An operator running a reefer hard across a year can easily burn well over a thousand gallons of diesel just in the refrigeration unit. At 24.

3 cents a gallon, the recoverable excise tax on that fuel runs into real hundreds of dollars per truck per year, money that most owner-operators simply never claim because they did not know the reefer fuel was separable from the highway fuel for tax purposes.

How the Credit Actually Gets Claimed For a small carrier who wants to capture this, the mechanics are worth knowing in plain terms, with the strong caveat that this is a conversation to have with a qualified tax professional before filing anything.

The most common route is IRS Form 4136, Credit for Federal Tax Paid on Fuels, which is filed with the annual income tax return. You report the gallons used for the nontaxable purpose, multiply by the per-gallon credit rate, and claim the credit against your income tax. For operators who would rather not wait unti