A new method of calculating federal excise tax (FET) on tires was included in the American Jobs Creation Act passed in October. Previously, the method for calculating FET on tires was based on the actual weight of the tire. For every 10 pounds of weight above 90 pounds, there was a charge of 50 cents, plus a flat fee of $10.50. Thus a tire weighing 118.63 pounds carried a tax liability of $24.81.
The new FET is based on the load-carrying capacity of the tire. For every 10-pound increment in load-carrying capacity above 3,500 pounds, a tax of 9.45 cents is levied. So, for a tire with a load carrying capacity of 6,175 pounds, a fleet would pay $25.27 in tax. Super single tires, however, are to be taxed at the same rate as bias ply tires, which is 4.725 cents for every 10-pound increment in load carrying capacity.
This gives super single tires a great advantage in the marketplace since taxes are cut in half and, since one tire replaces two, users of super singles will get a real deal in the tax department.