Originally published in the December 2015 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.
Some NTEA members ask whether or not FET applies to specific body and
equipment sales. With the seller of the body and equipment often responsible to
collect and submit the 12-percent tax to the Internal Revenue Service (IRS), it
is important to understand the requirements.
What you need to know
A truck body is potentially a separate taxable item irrespective of the
gross vehicle weight rating of the chassis on which it is mounted. In 2005, the
IRS Industry Issues Resolution Program established a safe harbor for four body
types (see Revenue Procedure 2005-19):
- Dry freight and refrigerated
truck van bodies no more than 24 feet long.
- Refuse packer truck bodies with
load capacities of 20 cubic yards or less.
- Platform truck bodies no more
than 21 feet long.
- Dump truck bodies with load
capacities of 8 cubic yards or less.
With these safe harbor rules, the IRS will not dispute non-taxability
of a body, regardless of the chassis on which it is mounted (again a body is a
separate taxable identity within IRS rules).
Relevant NTEA Excise Tax Enquirer articles
- Are
platform bodies greater than 21 feet subject to
FET?
- Suitable for use
determinations for dump bodies
- Truck bodies and truck
chassis: Separate tax determinations
- Applying Federal Excise Tax — A General
Overview
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.