If you've ever looked closely at a commercial tire invoice, you've seen a line item for FET (Federal Excise Tax). It's a cost that can add $15 to $50+ per tire, and it's one that many fleet managers don't fully understand. Here's what you need to know.
What Is the Federal Excise Tax?
The Federal Excise Tax on tires is a U.S. tax imposed on the sale of heavy-duty tires — specifically, tires with a load capacity rating of 3,500 pounds or more. It's codified in Internal Revenue Code Section 4071 and has been in effect in various forms since the 1940s.
The tax was originally designed to fund highway construction and maintenance through the Highway Trust Fund. Today, the revenue goes into the same fund, which supports federal highway and transit programs.
How Is FET Calculated?
The FET is calculated based on the tire's maximum load capacity, not its selling price. The current rate structure (as of 2026) is:
- Tires rated 3,500 lbs or more: $0.945 per 10 lbs of maximum load capacity exceeding 3,500 lbs
Here's an example for a typical 11R22.5 tire rated at 6,610 lbs (single) maximum load:
- Maximum load capacity: 6,610 lbs
- Subtract threshold: 6,610 - 3,500 = 3,110 lbs over threshold
- Divide by 10: 3,110 / 10 = 311 units
- Multiply by rate: 311 x $0.945 = $29.39 FET per tire
For larger tires with higher load ratings — like a 315/80R22.5 — the FET can exceed $40 per tire. It adds up quickly across a fleet.
Who Pays the FET?
The manufacturer or importer is technically responsible for paying the FET to the IRS. However, this cost is universally passed through to the buyer. When you see a tire quote from Oryx or any other dealer, the FET is shown as a separate line item on top of the tire price.
This is important to understand: FET is not a sales tax. It's an excise tax assessed at the point of first sale, and it applies regardless of whether the tire is sold to a fleet, a dealer, or an end consumer.
FET Exemptions
There are limited exemptions from FET:
- Tires sold for export — tires that leave the United States are exempt
- Tires sold to state/local governments — for use on government vehicles
- Retreaded tires — only the new tread material is taxed, not the full tire
- Tires rated under 3,500 lbs — passenger and light truck tires are exempt
Most fleet purchases do not qualify for any exemption. The FET is simply a cost of doing business in the commercial tire market.
Impact on Fleet Budgets
For a fleet of 50 trucks purchasing 200 replacement tires per year, FET alone adds $6,000 to $10,000 to the annual tire budget. It's a cost that can't be negotiated away, but it should be factored into budgeting and purchase planning.
When comparing tire prices between vendors, always compare tire price + FET as a combined figure. Some vendors quote prices inclusive of FET, while others show it separately. Make sure you're comparing apples to apples.
At Oryx, we always show FET as a transparent, separate line item so you know exactly what you're paying. Browse our inventory for competitive pricing on every commercial tire we carry.
