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The federal excise tax (FET) on trucks, tractors, and trailers is set to expire on March 31, 2012. The U.S. Senate has passed a bill to extend the deadline of the current retail excise tax on trucks, trailers, and tractors, but the U.S. House of Representatives’ attempts to pass a similar bill have failed.

Will Congress Extend Retail Excise Tax for Trucks, Trailers, and Tractors?

  • 3/28/2012

Retail Excise Tax Extended by 90 Days

(Update 4/2/12) The president has signed a bill passed by Congress to extend the current FET by 90 days, to July 1, 2012.

Will Congress Extend Retail Excise Tax for Trucks, Trailers, and Tractors?

(Originally published 3/28/12) The retail excise tax on trucks, tractors, and trailers, as part of the federal excise tax (FET), is set to expire on March 31, 2012. Last week, the U.S. Senate passed the bill Moving Ahead for Progress in the 21st Century, which extends the current retail excise tax on trucks, trailers, and tractors, and extends tax-free sales to state and local governments, to October 1, 2015.

Only the Senate has voted to extend the retail excise tax. The U.S. House of Representatives has made two attempts to pass their own extension: a five year extension was tabled, and a 90-day extension did not receive enough votes to pass.

“Ultimately, the House and Senate will need to reconcile their differences to pass an extension. It is hard to believe the government will pass up the opportunity to collect tax revenues for the highway system,” says Greg Althardt, a manager specializing in truck and trailer dealerships with CliftonLarsonAllen. “Given the short timeframe before the current expiration and possible lost dollars from a lack of FET revenue, the House will most likely pass the Senate version of the bill.”

Companies in limbo

Althardt believes that even if Congress does not pass a bill by the March 31 deadline, it will likely pass an extension that is retroactively effective on April 1, 2012. “If no law is passed by the end of the month, it leaves dealerships, manufacturers, and others unsure about whether excise tax should be collected on sales,” he says.

If Congress does not reach an agreement before March 31, 2012, Althardt suggests that companies continue to collect FET on applicable sales until the final extension is passed. “The IRS allows for provisions to collect FET refunds if there is a gap between the expiration and extension of FET,” he says.

CliftonLarsonAllen will continue to monitor and provide updates on action taken by Congress.

How we can help

Changes in the law or inaction by lawmakers can leave companies unsure whether they are complying with the correct FET laws. Make sure your tax advisor is knowledgeable about the dealership industry and understands how it is affected by the retail excise tax law.

Greg Althardt, Dealerships Manager or 314-925-4361