The Internal Revenue Service is casting its eyes on the growing glider-kitting business and seems set to begin collecting the 12% federal excise tax that most of the vehicles have been exempt from.

The National Truck Equipment Association and the National Trailer Dealers Association have each issued an alert to members, warning those in the glider business that they might soon have to begin collecting the FET from customers. The alerts stem from a recent IRS letter saying that its previous guidance should no longer be followed.

The old guidance included a “75% rule” whereby an FET-exempt glider kit cannot be priced more than 75% of the selling price of a comparable all-new truck. That rule will no longer be used, IRS said, because the “article” that’s assembled and sold is more new than used.

Most glider kits contain new frames, cabs, hoods, and steer axles and are assembled with used, rebuilt or remanufactured engines, transmissions, and drive axles. In recent years, gliders have “evolved” from being rebuilt wrecks, based on existing vehicles, to trucks and tractors sold in place of brand-new vehicles, an NTEA source said.

Those active in glider kitting have adhered to the spirit of the rebuilt wreck rules by supplying vehicle identification numbers from “donor” trucks that customers can use in registering them. Enforcement of this principle has varied among the states, sources have previously said.

NTEA and NTDA say the IRS’s new guidance includes four “scenarios” to illustrate when the FET might or might not be applied. The association’s specialists are digesting the IRS communication and will include it in an upcoming FET Guide, due out in March.

Exemption from the FET is a major benefit of buying gliders instead of new trucks, though other advantages, including the use of less costly “pre-emission” diesels, remain.  

Watch for further clarification from the associations and comment from companies active in glider assembly and sales.

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Tom Berg

Tom Berg

Former Senior Contributing Editor

Journalist since 1965, truck writer and editor since 1978.

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