DPFs subject to excise tax, court rules in lawsuit brought by truck dealer
In a recent article on Overdrive, it was reported that a lawsuit appealing the 12% federal excise tax on DPFs that come equipped on new trucks was rejected by the Eighth Circuit Court of Appeals on Aug. 23. According to Thompson Truck and Trailer who brought the lawsuit, this tax is adding an extra $960 on average to the price of a new truck and DPFs shouldn’t be included in the parts affected by the excise tax.
“Thompson argued in its suit that the term “parts and accessories” was ambiguous in its application to DPFs. The court disagreed. “We conclude that when the phrase ‘parts or accessories’ is given its ordinary or natural meaning, the statute is not ambiguous and the filters fall within its scope,” the judges wrote in their Aug. 23 opinion.
DPFs are filters in truck exhaust systems designed to catch and hold particulate matter so it’s not released into the air. Truck and engine makers began using DPFs about a decade ago as a means to comply with federal emissions regulations.”
There is hope however that the whole excise tax could be repealed if the bill recently introduced passes in the Senate.
“U.S. Sen. Cory Gardner (R-Colo.) has introduced a bill to repeal the 12-percent federal excise tax (FET) on the sale of heavy-duty trucks and trailers, a move heavily applauded by the American Truck Dealers association.
ATD says federal excise tax on commercial trucks and buses was originally imposed in 1917 to help pay for World War I. It has grown from 3 percent to 12 percent and adds $12,000 to $22,000 on the price of a new heavy-duty truck.”
Get the latest on the industry and DES.