Can I Claim a discount on the tire excise tax

The Tire Excise Tax, which is a federal tax imposed on the tires of heavy vehicles like trucks and trailers. This tax applies to tires that are made either wholly or partially of rubber and are marked according to federal regulations for highway use.

In most cases, excise taxes are not directly imposed on end customers. Instead, the responsibility for paying the Tire Excise Tax falls on the following entities:

• Tire Manufacturers: The businesses that produce the tires.

• Producers: The entities involved in manufacturing the tires.

• Importers: Those who import taxable tires into the country.

It’s important to note that the Tire Excise Tax is applied when the taxable tires are delivered to manufacturer-owned retail stores, not at the point of sale to customers. This means that the tax is levied at the time of delivery, before the tires reach the retail market.

The Tire Excise Tax varies depending on the type of tire, and tires are categorized into three main groups for easier understanding of the tax rates:

1. Taxable Tires (excluding biasply or super single tires):

• Tax rate: $0.0945 per pound.

2. Taxable Biasply or Super Single Tires (other than steering tires):

• Tax rate: $0.04725 per pound.

3. Taxable Super Single Tires Designed for Steering:

• Tax rate: $0.0945 per pound.

Here’s a brief description of the different tire types:

• Biasply Tire: A type of pneumatic tire where the ply cords are laid at alternate angles less than 90 degrees to the centreline of the tread.

• Super Single Tire: A tire with a cross-section width of more than 13 inches, designed to replace two tires in a dual fitment.

In addition to these three categories, there's another tax type:

Certain types of tires are exempt from the Tire Excise Tax. Some common exemptions include:

• Recapped or Retreaded Tires: If a tire was previously sold in the U.S. and was taxable at the time of sale, it is exempt from the excise tax if it has been domestically recapped or retreaded.

• Tire Carcasses: Tires that are not suitable for commercial use, referred to as tire carcasses, qualify for a tax exemption.

• Tires for Buses: Tires used primarily for qualifying intercity, local (more than 50% of usage), and school buses (85% or more usage) are tax-exempt, provided they are properly registered.

• Tires for Military Use: Tires sold for the exclusive use of the Department of Defense or the Coast Guard are exempt from the excise tax.

• Tires for Mobile Machinery: Certain types of tires exclusively designed for mobile machinery are also exempt from the Tire Excise Tax.

These exemptions help reduce costs for specific industries and applications, provided the tires meet the necessary criteria for tax exemption.

A credit or refund can be claimed for the Tire Excise Tax already paid, depending on the specific circumstances. However, it is important to note that any credit or refund will not include interest. Tires eligible for a credit or refund include:

• Exported Tires or Tires Sold to State/Local Governments: Tires exported or sold for the exclusive use of a state or local government are eligible for a refund.

• Tires Sold to Nonprofit Educational Organizations: Tires sold to nonprofit educational institutions for their exclusive use can qualify for a refund or credit.

• Tires Sold to Qualified Blood Collector Organizations: Tires sold for exclusive use in vehicles primarily involved in the collection, storage, or transportation of blood are eligible for a refund.

• Tires for Buses: Tires sold in connection with qualified intercity, local, or school buses may also qualify for a refund or credit.

In all of these cases, the person who paid the Tire Excise Tax is the one eligible to claim the credit or refund.

To claim a credit or refund for the Tire Excise Tax, you need to choose Form 8849. 

Follow these simple steps to complete the process:

1. Login to Your Account: Access your account and enter your business details.

2. Select Form Type: After adding your business details, choose Form 8849 from the dropdown menu.

3. Choose Schedule Type: Select "Other claims" from the schedule type options and specify the applicable tax year and month.

4. Fill Out Other Claimable Tax Section: Indicate the year and quarter relevant to your claim.

5. Select the Relevant Options for Your Claim: Choose from the following options based on the type of tires:

• Taxable tires other than biasply or super single tires (396)

• Taxable biasply or super single tires (304)

• Taxable super single tires designed for steering (305)

6. Enter the Number of Taxable Tires: Provide the total number of taxable tires for which you are claiming a refund.

7. Specify the Amount of Claim: Enter the amount you wish to claim and provide an explanation for the claim.

8. Pay the Processing Fee: Complete the payment of the processing fee and finalize your claim filings.

Once the IRS approves your request, your credit claim will be processed, and the credit amount will be added to your account. This credit can then be utilized for your next tax filings.

WRAP:

This blog offers a clear understanding of Tire Excise Taxes, including their definition, applicable rates, and who is responsible for payment. It also explains which tires are subject to tax and which are exempt, as well as the process for claiming refunds or credits. 

With this knowledge, you’ll be better equipped to navigate Tire Excise Taxes and maximize any potential refunds or credits.

Claim Your Credit Online in a few minutes!