Congress sets new excise tax on truck tires

Nov. 29, 2004

The new Federal Excise Tax (FET) on medium and heavy truck tires will go into effect on Jan. 1.

New tax calculations are based on the load carrying capacity of a tire as opposed to weight.

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 of carrying capacity.

"The tax is also based on the maximum carrying capacity, which means even if a tire is used in a dual capacity, it is taxed at the single rate," say Tire Industry Association (TIA) officials.

"According to our legal analysts, any tires you have in inventory on which you’ve already paid the FET, you would pass the old tax rate on to your end user. The ´taxable event´ has already occurred."

Congress passed the “simplification” of the FET as part of the American Jobs Creation Act.