Trailer Dollies Now Subject to Federal Excise Tax
In a memo published earlier this summer, the Internal Revenue Service (IRS) announced that they will reverse their long-held position that dollies are not subject to the federal excise tax (FET). Over 28 year ago, the IRS announced in a memo that the 12% FET would not apply to dollies but over the course of the past year in two separate memos, the IRS has reversed course and states that now most trailer dollies, also known as auxiliary axles or converter gear, should in fact be charged the FET.
These changes will apply to all equipment sold after July 1, 2016. The memo states that any dollies suitable for use with a vehicle with a gross weight over 26,000 pounds would be considerable taxable.
You may view the IRS memo by clicking here
If you have any questions, please contact Peter Einisman at PeterEinisman@trala.org