[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Extensions of Remarks]
[Page 2912]
[From the U.S. Government Publishing Office, www.gpo.gov]



      LEGISLATION TO SIMPLIFY THE EXCISE TAX ON HEAVY TRUCK TIRES

                                 ______
                                 

                            HON. WES WATKINS

                              of oklahoma

                    in the house of representatives

                         Tuesday, March 6, 2001

  Mr. WATKINS. Mr. Speaker, I rise today to introduce legislation that 
would simplify the excise tax on heavy truck tires.
  The IRS and the tire manufacturers are today laboring under an 
unnecessary administrative burden. The tire industry pays an excise tax 
on heavy truck tires that goes directly to the Highway Trust Fund. But 
the means by which the IRS collects the tax are inefficient and costly. 
Under the current collection system, the IRS requires manufacturers to 
weigh each line of taxable tires for each tire size, to track the sales 
and taxes paid for each tire, and to maintain burdensome compliance 
systems to verify sales and tax payments by weight. Manufacturers must 
determine if a tire is for a taxable highway use or for a non-taxable 
off-road use, and then track whether the purchasers are tax exempt. 
This system of tax collection is both onerous and wasteful; I propose 
we change it.
  The legislation I am introducing today would reduce these 
administrative burdens without reducing any revenue to the Highway 
Trust Fund. It does this by revising the current system based on the 
weight of the tire to one based on the weight-carrying capacity of the 
tire. This new system would simplify the payment and collection of 
taxes for both the tire industry and for the IRS--resulting in reduced 
expenses for both.
  We also may simplify this tax by adopting a bright line that 
identifies which tires are subject to the excise tax. Under the Federal 
Motor Vehicle Safety Act, as administered by the Department of 
Transportation, all tires sold in the U.S. for highway service are 
required to be marked with the maximum weight carrying capacity of the 
tire. The IRS would take the data already collected by the DOT and base 
its tax on the amount per pound of weight carrying capacity. And the 
tax rate would be set at an amount that provides revenue neutrality to 
the U.S. Treasury.
  This much-needed bright line test would be simple to apply and easy 
to enforce: Tires that meet the DOT test by being marked with the 
appropriate notation are subject to tax. Tires that are not marked 
cannot be used on the highway.
  I encourage my colleagues to join us in supporting this legislation.

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