TIA Support Restructure of Truck Tyre Tax
The Tyre Industry Association (TIA) has announced that it will support moves to restructure how the Federal Excise Tax (FET) is calculated on truck tyres.
The association has decided to support proposals found in two House bills, the American Jobs Creation Act (H.R. 4520) and the Transportation Equity Act (H.R. 3550), also known as the Highway Funding Bill, that contain language to modify how the FET is calculated. If passed by the US House of Representatives, it would change the current FET from a weight-based system to one founded on the load carrying capacity of the tyre.
“Two years ago, TIA promised to work on this concept with the tyre manufacturers as long as it was revenue-neutral,” said Roy Littlefield, executive vice president of the association. “We’ve run the numbers and it appears this proposal will generate the same amount of revenue for the Highway Trust Fund without placing a major burden on the tyre industry. Since the retreader exemption remains intact and the difference between new tyre and retread prices will remain relatively the same, our retread members should not be negatively affected.”
The newly proposed tax system would impose a 9.4 per cent tax on radial truck tyres for every 10 pounds of carrying capacity over 3,500 pounds. However, there is still a gray area concerning the bill’s definition of bias ply tyres. The TIA claims that it will continue to work with Congress to replace the definition with one that more accurately differentiates bias and radial tyres.
If adopted, there is also a chance that this language would make the FET permanent, instead of having to be reauthorised every six years in the highway funding bills.