TMC Survey May Be Used to Thwart IRS Plan

A recent survey of tire-use patterns conducted by The Maintenance Council (TMC) of the American Trucking Associations (ATA) may be used by ATA to thwart an Internal Revenue Service (IRS) plan to change the tax status of truck tires.

As it stands now, tires can be written off as an operating expense within the first year of use. However, the IRS is considering whether or not to have tires depreciated over several years. Largely based on tire advertisements, the agency says truck tires can now last anywhere from 200,000 miles to 400,000 miles before being replaced or recapped.

At the behest of the ATA's National Accounting and Finance Council, TMC sent a detailed survey to more than 700 of its members to determine how long truck tires in different applications actually last.

TMC said the 59 responses it received showed tire life covered a spectrum from 50,000 miles to, in some cases, 350,000 miles. Most of the responses, however, showed tire life did not exceed 200,000 miles - well below what concerns the IRS.

Of the respondents, 13 were national linehaul fleets, 17 were regional linehaul fleets, 13 were private carriers, three were leasing fleets, three were pick-up-and-delivery fleets, three were government fleets, and two were utility fleets. The bulk of the respondents operated Class 7 and 8 trucks, with 13 running fleets with 50 to 99 trucks and 14 with fleets numbering more than 1,000 power units.

While the survey is not a statistically representative sample of the trucking industry, it nonetheless highlights tire life "indicators" that may be useful to blunt IRS tire tax reform. TMC plans to make the entire survey available to the public later in 2000.

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