FET Requirements for the Installation of Replacement Bodies on Trailers

Originally published in the August 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.

Recently, some members have contacted the NTEA with questions regarding taxability when installing replacement bodies on trailers. Many of these members believe a trailer is a single item and should be subject to the 75% rule. Unfortunately, the Internal Revenue Service (IRS) does not see it this way. 

What You Need to Know

• The IRS considers a trailer as two taxable articles — composed of a trailer chassis and trailer body.
• As trailers have a lower taxable gross vehicle weight rating threshold than trucks, it is important to exercise caution when determining whether the replacement body in question is taxable.
• The IRS has multiple rulings on what constitutes a trailer chassis for FET purposes, and you may be surprised at how few components are needed in order to be considered a trailer chassis.

As always, the Technical Services Department is available to help answer your FET questions before, during and after a sale. In addition, the NTEA’s staff engineers can help identify any IRS rulings that may support your FET position.

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.