You should maintain all signed documents for a period of three years.
FET TAX ON TRAILERS REGISTRATION
With sales to state and local government, you must obtain an exemption certificate from the officer of the state or local government - no registration is required - and it must be for the exclusive use of the government entity. Tax-free sales involve sales to state or local governments non-profit educational organizations qualified blood collector organizations sale for export sale for further manufacturing supplies for vessels and aircraft. Q: When selling a unit to the US government, is this sale tax-free?Ī: “Units sold to the US government are subject to FET. Off-highway vehicles must be specifically designed for the primary function of transporting a particular type of load off road and because of their special design are substantially limited or impaired in their capability to transport a load over a public highway at 25 miles per hour.” It's only on tractors, not trucks, according to current legislation. Idle-reduction devices must be approved by the EPA prior to tax-free sale.
FET TAX ON TRAILERS CODE
Q: What sales are exempt from FET under code section 4053?Ī: “No registration is required or documentation under these sales: camper coach bodies for self-propelled mobile homes feed and seed fertilizer equipment house trailers ambulances and hearses concrete mixers trash containers rail trailers and rail vans mobile machinery idle-reduction devices advanced insulation off-highway transportation vehicles and non-transportation trailers and semitrailers.
With the sale of a used trailer within six months of the new sale, FET is due on the second sale, but you can file for reimbursement of FET.” The lessor is responsible for FET, and will want to include FET in figuring lease payments. Short-term or long-term leasing can trigger FET. Use can trigger FET - use in a short-term rental fleet while for sale. Q: How is the first retail sale determined?Ī: “The first retail sale is defined by the IRS as the following: any sale that doesn't fit one of the following exceptions: (1) A prior taxable sale of a body has occurred (six-month rule on used trailers) (2) the sale qualifies for tax-free treatment under IRC S 4221 (3) the sale is for resale and the sale for resale satisfies the requirements for tax-free treatment. FET is set to expire again on April 1, 2012.
FET is 12% of the total sales price on the trailer and all applicable equipment. FET is due on the first retail sale of a trailer that is over 26,000 GVW. The top questions, and the answers Wiggins provided:Ī: “The Retail Federal Excise Tax on trailers and trucks are written into the IRS code in sections 4051-4053, and there are also detailed instructions under Publication 510. Wiggins said there is little chance of that passing by March 31, 2012, but it could gain momentum depending on length of the next FET extension. The National Auto Dealers Association (NADA) and its American Truck Dealers (ATD) division have been seeking support for the following: eliminating the current FET system on heavy trucks (and presumably trailers) and replacing it with a “revenue-neutral” 7.3 cents increased diesel tax. Beyond this date, it will have to be extended again, terminated, or changed. Part of this act extended the existing retail FET tax on heavy trucks, tractors, and trailers through March 31, 2012. On September 16, the Surface and Air Transportation Act was signed. Wiggins said the FET system was to expire on September 30, 2011, unless extended by Congress. Instead, Althardt, Dave Wiggins, and Terry Werner - CPAs for LarsonAllen - explained the issues involving FET and examined the top questions they have received. GREG Althardt told the NTDA attendees that he and his LarsonAllen LLP cohorts could sit in the meeting room for two days and still not answer everybody's specific questions about the Federal Excise Tax (FET) and IRS Code Section 263A.
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