• IRS Compliance Focus: The Excise Tax on Heavy Trucks
  • January 18, 2017 | Author: John Pedro Dombrowski
  • Law Firm: Shumaker, Loop & Kendrick, LLP - Toledo Office
  • There is no steering around the Federal Excise Tax (“FET”) on heavy trucks and trailers, and some companies are finding that out in the most unpleasant way possible - through an IRS audit. Similar to states’ sales taxes, the federal government imposes a 12% tax on the sale of trucks with a gross vehicle weight (“GVW”) above 33,000 pounds, trailers above 26,000 pounds, and tractors above 19,500 pounds. Although trucks sold with a GVW of 33,000 pounds or less are exempt from the tax, if that same truck is later modified to exceed the 33,000 pound threshold, whoever owns the truck at that time becomes liable for the tax (same goes for modifications of tractors and trailers). Enter the Cascadia by FreightlinerTM and the Internal Revenue Service’s (“IRS”) focus on those who purchase it.