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Imported Casings Tax


The Tire Industry Association provided an update to the Tire Retreaders and Repair Information Bureau concerning what TRIB calls “the IRS’ re-interpretation and then back-tracking from a revenue rule concerning Federal Excise Tax on imported casings.” 

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Below is information TIA shared with TRIB membership regarding the issue:
“A new interpretation of a decades-old revenue ruling resulted in the IRS sending out 10 field agents to crack down on retreaders who were not paying FET on imported casings that were being retreaded.

“Within two weeks, five TIA members contacted the association office because they were being investigated by the IRS and were facing significant fines and tax bills.

“TIA immediately contacted the IRS and presented a long history of rules, regulations and revenue rulings. On May 19, the IRS contacted TIA and confirmed that they had reviewed and ultimately reversed their earlier action and released the affected retreaders from any liability.


“The confusion resulted from an interpretation of a revenue ruling that spelled out that imported casings suitable for road use should be taxed. They interpreted that a retreaded tire was suitable for road use and was therefore subject to the new FET because it had not been previously taxed.

“The association had worked on a revenue ruling that clearly stated that an imported casing not suitable for use would be considered a raw material to be used in the retread process and would not be subject to the FET.”

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