The exemption from the 12 percent federal excise tax applies to auxiliary power units and other idle-reduction devices installed on trucks when the trucks are new or within six months of being put into service.
The catch is that to be exempt, APUs and other devices have to be "verified" as effective by the U.S. Environmental Protection Agency in consultation with the Departments of Energy and Transportation.
That verification could take some time, according to the ATA's State Laws Newsletter, "although we understand that those interagency discussions have actually begun, and may be going faster than might be expected. ATA is hopeful that verification of exempt devices can be accomplished by the end of 2008."
In the meantime, truck dealers and suppliers of APUs are likely to have a list of items that are being considered by EPA for exemption, ATA says. Pending the EPA's determination, purchasers will still have to pay the excise tax on such devices and request a refund from IRS.
In addition to APUs and other idle-reduction devices, the new law provides an excise tax exemption for the cost of what the provision terms "advanced insulation" on new trucks and trailers; that is, insulation that has "an R value of not less than R35 per inch." That exemption is also in effect, and the law does not seem to require that qualifying insulation be verified by EPA, according to the ATA publication.