FET Relevance When Importing from Canada

Originally published in the January 2014 edition of Tech Trends (e-newsletter and as an article within NTEA News), this article is also available to you below as an employee of an NTEA member company.

In the past month, the NTEA’s Technical Services Department has received quite a few federal excise tax (FET) questions on trucks and truck bodies imported from Canada. Many of these questions concern the applicable taxes and who is responsible for paying the FET to the Internal Revenue Service (IRS).

What You Need to Know

  • Taxable truck bodies and truck chassis imported from Canada are taxable upon their first retail sale or use in the U.S. 
  • Used taxable truck bodies and taxable truck chassis exported from Canada are subject to FET when imported into the U.S. — unless the importer has full documentation that can prove the body or chassis was sold at retail in the U.S. prior to exportation to Canada.
  • The importer is responsible for paying the tax to the IRS. If a U.S. end-user purchases a taxable truck body or taxable truck chassis in Canada and brings it to the U.S., the end-user is considered the importer and is responsible for any paying FET due to the IRS.
  • When purchasing used taxable vehicles or bodies in Canada, assume you will be responsible for the FET due after importing them to the U.S. and plan accordingly.

Are you faced with technical or engineering challenges?
Contact the Technical and Engineering Hotline at 800-441-6832 for individual attention on varied topics such as Federal Excise Tax, truck certification and labeling, vehicle compliance and truck spec’ing. The Hotline is available Monday-Friday, 8am-5pm (EST). Members can contact the Association as frequently as needed.