Tire Industry Association

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FOR IMMEDIATE RELEASE	TIA Contact: Roy Littlefield
May 3, 2007	301-430-7280

TIA Worked with IRS to Clarify No FET Liability
on Imported Casings and Retreads

Bowie, MD – (May 3, 2007) The Tire Industry Association (TIA) announced today that it has worked with the Internal Revenue Service (IRS) on clarifying the Federal Excise Tax (FET) liability on imported casings. After several phone calls came into the TIA office on the same day three weeks ago, it became apparent that the IRS was taking a sudden interest in tire casings importers.

At the beginning of this issue, there was speculation that the reporting from U.S. Customs, which has greatly improved since 9/11, picked up a large number of “tire importers” that had not filed Form 720, the Quarterly FET Return. Working with an IRS headquarters FET policy analyst, TIA quickly convinced the IRS field agents that these casings were not, in fact, subject to the FET. “But the IRS suddenly felt they had a window of opportunity to collect the FET on retreaded tires made from imported casings due to some inadvertent language contained in a committee conference from the passage of the American Jobs Creation Act of 2004 when the FET was changed from a weight to load range basis,” according to TIA Director of Government and Business Relations Paul Fiore. “To their credit, when Roy Littlefield defended the long-standing industry position that no retreaded tires are subject to the FET, the IRS continued to work with us,” Fiore also stated.

As the issue unfolded, TIA worked with the Tire Retread Information Bureau (TRIB) trying to keep members apprised of the situation. Ultimately, it was an older IRS Field Service Advisory stating, "foreign tire carcasses that are first imported and then recapped domestically are not subject to tax imposed by the Section 4071 tax unless they are suitable for use as tires at the time of their importation," that was very clear and on point and led to the final clarification. IRS field group managers were notified of the clarification by e-mail on May 2, 2007. “We were pleased that the IRS continued to cooperate with TIA until the denouement of the issue,” remarked TIA Executive Vice President Roy Littlefield.

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TIA is an international association representing all segments of the tire industry, including those that manufacture, repair, recycle, sell, service or use new or retreaded tires, and also those suppliers or individuals who furnish equipment, material or services to the industry. The Tire Industry Association (TIA) has a history that spans more than 80 years and includes several name changes. Originally known as the National Tire Dealers & Retreaders Association (NTDRA), the organization gave birth over the years to the American Retreaders Association (ARA) and the Tire Association of North America (TANA). ARA changed its name to the International Tire & Rubber Association (ITRA) and merged with TANA in 2002 to form the current Tire Industry Association (TIA), which now represents every interest in the tire industry.

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