Federal Excise Tax Exemptions on Trucks 2026
What is the Federal Excise Tax (FET) on Trucks?
The Federal Retail Excise Tax (FET) is a tax levied by the IRS on the purchase of vehicles used for highway transportation. The standard rate of FET on trucks is 12% of the sales price, applied to trucks with a gross weight of over 33,000 pounds.
This tax is imposed only once on the purchaser at the time of the first retail sale of the vehicle. The vehicles subject to this tax include trucks, truck chassis, and trailers, as specified in IRC Section 4051.What are the exemptions available for trucks in 2026?
There are a number of exemptions available for trucks in 2026. The exemptions are meant to reduce the tax burden for particular vehicles and situations. Below are the most significant exemptions:
Vehicle Weight-Based Exemptions:
Trucks whose gross vehicle weight is 33,000 lbs. or less, truck trailers, and semi-trailer bodies whose gross vehicle weight is 26,000 lbs. or less are exempted from FET.
Tractors that are used primarily for highway transportation and whose gross combined weight is 33,000 lbs. or less are also exempted.
Exemptions for Components:
If the vehicle's body, chassis, or tractor components have already had the excise tax settled (e.g., tires or other parts incorporated into the vehicle), they may be exempt.
Special Vehicle Exemptions:
Platform truck bodies shorter than 21 feet.
Dry freight and refrigerated truck van bodies shorter than 24 feet.
Dump truck bodies with a capacity of 8 cubic yards or less.
Refuse packer truck bodies with a capacity of 20 cubic yards or less.
Specific Use Exemptions:
Bodies made specifically for processing, hauling, and spreading feed, seed, and fertilizers are exempt when used exclusively for those purposes.
House trailers, ambulances, hearses, and certain specialized equipment like concrete mixers and idle-reduction technologies are exempt under IRS Section 4053.
Government and Tribal Exemptions:
Vehicles purchased by the government or a local government for their use may qualify for exemption.
Certain sales to tribal governments for their use may qualify for exemption depending on the use.
Low-Usage Vehicles:
Vehicles driven less than 5,000 miles a year or agricultural use of the vehicle driving less than 7,500 miles a year may qualify for exemption depending on the conditions.
Summarizing the Federal Excise Tax (FET) exemptions based on the gross vehicle weight for better clarity:
When is the 12% Federal Excise Tax (FET) Due for Trucks?
The 12% Federal Excise Tax (FET) on trucks is applied to the first retail sale of the truck. The tax is paid immediately at the time of sale to the manufacturer or dealer. However, the quarterly filing of the tax using Form 720 is required to report the excise tax paid during the quarter.
Here’s a breakdown of when the FET is due and when the tax is reported for a given quarter:
Note: If the due date falls on a federal holiday, payment is due on the next business day.
Example of First Sale and Reporting Timing
This table illustrates how the 12% FET is paid on the first retail sale and reported in the Form 720 due date for each quarter:
What Happens If You Don’t Pay Truck Excise Tax on Time?
Failure-to-file: 5% per month (up to 25%) of the tax due.
Failure-to-pay: 0.5% per month (up to 25%) of the unpaid tax, plus interest.
Interest: Charged on overdue amounts at the federal interest rate, compounded daily.
What are the Methods for Paying Truck Excise Tax?
Manual Payment: You have an option to download Form 720, fill it out, and mail it along with payment to the IRS. This method involves the physical submission of the form and payment.
Online Payment: Simple720 is an IRS-authorized Truck Excise Tax online portal for payment of the truck excise tax. This is an efficient method to make an online payment.
Are there any new IRS provisions for 2026?
The IRS is still refining its guidelines regarding FET exemptions and filing requirements. Some significant changes and clarifications in 2026 include:
Mobile machinery and chassis, which are required to be fixed and utilized for specific non-highway purposes, are now eligible for exemptions.
Idle reduction technologies are being increasingly recognized as qualifying exemptions, as they decrease fuel consumption and emissions.
Conclusion
If you're a truck seller eligible for Federal Excise Tax (FET) exemptions, understanding the latest IRS guidelines for 2026 is essential to ensure compliance and avoid penalties.
Filing electronically through Simple720, the #1 IRS authorized e-filing platform in the US, helps reduce costs and time spent on accurate tax filing.
File your Truck Federal Excise Tax Online with Simple720!
