TIA sets IRS straight on taxes for imported casings, retreads
The Tire Industry Association (TIA) says it has helped clarify the federal excise tax (FET) liability on imported casings and retreads to the Internal Revenue Service (IRS).
"After several phone calls came into the TIA office on the same day three weeks ago, it became apparent that the IRS was taking a sudden interest in tire casing importers," say TIA officials.
There was initial speculation that U.S. Customs had picked up a large number of tire importers who hadn't filled out necessary FET paperwork.
TIA quickly convinced the IRS that these casings were not subject to the FET.
However, TIA officials say the IRS "suddenly felt they had an opportunity to collect the FET on retreaded tires made from imported casings due to some inadvertent language contained in a committe conference" from three years ago.
"To their credit... the IRS continued to work with us," says TIA Director of Government and Business Relations Paul Fiore, after TIA Executive Vice President Roy Littlefield explained the tire industry's position that no retreaded tires are subject to the FET.
Ultimately, an old IRS Field Service Advisory stating that "foreign tire carcasses that are first imported and then recapped domestically are not subject to tax imposed by the Section 4071 tax unless they are suitable for use as tires at the time of their importation" led to the clarification.
IRS field agents were notified of the clarification by e-mail on May 2.