Taxes paid on the sale of a product are known as excise taxes. The rules surrounding the excise tax on trucks are changing in response to the IRS’s new definition of a highway vehicle. This change affects the price of trucks as well as the industry as a whole.
The New Tax
The new tax affecting the trucking industry is an excise tax of 12%. This tax is applied to the sale of trucks and their associated parts. This means that the seller of any truck or truck part must pay a tax of 12% of the price they ask for. In order to compensate for the tax, it is likely that sellers will raise the price of trucks and their parts in order to prevent profit losses from the 12% excise tax. On a larger scale, the increase in the price of trucks and truck parts will cause trucking companies who are the primary consumers of these products to reduce costs in other areas of their business. In order to avoid loopholes, the IRS states that a truck is a highway vehicle designed to carry its load on the same chassis as the engine. In order to further solidify their new tax, they have created a new definition for highway vehicle.
New Definition of Highway Vehicle
A highway vehicle is any self-propelled vehicle designed to carry a load over public highways. With this new definition, there are a few ways in which a vehicle does not qualify as a highway vehicle. The first of these ways is if the vehicle is permanently attached to machinery that is not used for public highway transportation. The second way in which a vehicle is disqualified is if it is designed only for one type of load. In order to be classified as a highway vehicle, the truck must be capable of carrying different loads. If the vehicle for sale cannot be classified as a highway vehicle then the seller is not responsible for the excise tax associated with highway vehicles.
Possible Effects on Truckers
With the increased price of trucks caused by the new tax, trucking companies will be looking for ways to reduce other costs. This could mean reducing the number of drivers on the road, or the number of trucks a company owns. In either case, the burden of the new tax falls mostly on trucking companies and their drivers. If you have been personally affected by these cuts as a result of the new taxes, remember that contacting Spec Personnel is the fastest way to get placed into a great new job that fits your skills and preferences.
A new tax is affecting the trucking industry. It requires sellers to pay 12% of their selling price on all trucks and truck parts. This leads to an increase in truck prices created by the sellers to compensate for the tax. We have yet to see how trucking companies will deal with the increased cost of trucks and truck-related products.
IRS description of the new tax: http://bit.ly/29M6lvy
Original source: http://bit.ly/29RElHr