Safe harbor rules for FET

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.