News You Can Use

RTA NEWS YOU CAN USE
August 22, 2017

RTA Member Robert Sherwood of Tristani Rubber Industries Inc. (Puerto Rico)

would like us to share this note that he wrote

concerning imported retreaded truck tires.

He would like to hear your comments about these situations.

(Bob's email address is included below so you can respond to him directly,
or you can respond to RTA via this email
and we will forward your responses to Bob.)

SUBJECT: PRICES OF IMPORTED RETREADED HWY TRUCK TIRES

I am very concerned about the future of the truck tire retreading industry in the United States.

I suspect that Imported highway type retreaded truck tires are presently either being sold in the U.S at prices below their real cost or federal excise taxes are not being paid. If this is happening, then the US. truck tire retreader cannot compete and will eventually go out of business

For example:  Currently a United States retreaded 16ply 11R22.5 sells for approx. $135.00.

The same tire retreaded in Korea is sold in the United States for approximately $98.00.  The FET tax on a retreaded 16 ply 11R22 .5 imported from Korea tire is $29.32.  If the FET tax of $29.32 is added to the tire's selling price it would sell for $127.32.

The difference in price is $7.80 which an American customer would normally pay to receive an American product.

If the difference in price is $37.00 the U.S retreader loses the sale and The IRS loses the $29.32 FET tax. Multiply this by the thousands of imported truck tire retreads imported each year and the loss becomes substantial. We have a lose-lose situation.

To understand the FET tax collection process, I contacted the office of Stefanie Bland, Chief of the IRS Excise Branch, and spoke with attorney Natalie Payne who referred me to Mr. Joe Mazzuca.

Mr. Mazzuca, a IRS tax policy analysis in the IRS Chicago office (630-493-5008), explained to me that a receiving dealer of the imported retreaded truck tires is responsible to report on form 730 and pay the FET taxes for the tires sold on a quarterly basis just like the importing dealer of new tires... 

I asked Mr. Mazzuca how many retreaded truck tires are being imported annually but would not give me any information on importers or taxes being paid as this is confidential information. He said the IRS does publish a quarterly a report on the dollar value of the FET taxes received but it does not identify the importer, the number of tires sold or if the tires are new or retreaded.

Without public access to information on the number of retreaded highway type tires by size and the dollar amount of FET taxes being paid, how can the amount of FET taxes that should be collected be determined? Who audits the dealer's FET tax reports on imported retreaded tires? 

I do not have any hard evidence of maleficence in the price of imported retreaded truck tires but it appears to me that someone has figured out a way to avoid paying the FET.

I will appreciate any comments from retreaders on this subject.

Robert W. Sherwood, President

Tristani Rubber Industries Inc.

rsherwood@tristani.com

• • • •
Thought for the day

"Power without love is reckless and abusive,
and love without power is sentimental and anemic.
Power at its best
is love implementing the demands of justice,
and justice at its best
is power correcting everything
that stands against love."
~ Martin Luther King, Jr