TIA "pleased" with FET changes
"The reason for the change in the calculation of the Federal Excise Tax (FET) is tax simplification," says Tire Industry Association (TIA) Director of Government Affairs Becky MacDicken.
The new FET on medium and heavy truck tires goes into effect on Jan. 1. Radial tires will be taxed at 9.45 cents for every 10 pounds over 3,500 pounds of load carrying capacity. Bias ply and super single tires will be taxed at 4.725 cents for every 10 pounds over 3,500 pounds of carrying capacity.
"According to the Joint Tax Committee, this new tax calculation will be ´revenue neutral,´ meaning the overall amount of money the treasury takes in will not change.
"Some tires may have a higher FET, but on the flip side, some will be lower than under the old FET, so the government has found the levels at which it´s a neutral tax change."
MacDicken says TIA members "should barely see any difference" in the transition to new FET calculations.
TIA´s board voted in 2002 to find the tax rate at which a new computation based on load carrying capacity could be used.
"We are pleased to have this new method for calculating the FET. There may be a bump or two in the transitional road, but in the long run, this will be easier for the industry."