IRS backs off taxing dollies
By Bob Pitcher, State Laws Newsletter By a memorandum from the Office of the Chief Counsel dated December 6, 2016, the Internal Revenue Service announced that it is “re-evaluating” its recent shift in position on the application of the 12 percent federal excise tax to converter gear (dollies or auxiliary axles). For nearly thirty years,…
By Bob Pitcher, State Laws Newsletter
By a memorandum from the Office of the Chief Counsel dated December 6, 2016, the Internal Revenue Service announced that it is “re-evaluating” its recent shift in position on the application of the 12 percent federal excise tax to converter gear (dollies or auxiliary axles). For nearly thirty years, IRS’s position had been that dollies were exempt from the FET, but, by memos issued last December and in June this year, IRS reversed itself unilaterally, without notice or public hearing, and concluded that dollies used with semitrailers over 26,000 pounds gross weight – that is, all dollies – are taxable.
ATA and the Truck Trailer Manufacturers Association requested IRS to reconsider, and IRS is evidently doing so. The most recent memo closes with a direction to taxpayers not to follow the two earlier memos. This leaves dollies nontaxable, at least for the time being. We’ll keep you posted. For more, call Rachel Smith at IRS, (202) 317-6855.