Federal excise tax on semi trucks: the 12% FET, line by line

The federal excise tax on semi trucks, usually called FET, is a 12% federal tax on the first retail sale of a new heavy truck, tractor or trailer. On a new tractor it is often the biggest line on the buyer's order after the truck itself. This page shows where it sits on a deal, which trucks it covers, how the dealer figures it, and why used trucks normally skip it. We checked every rule against the statute and IRS Publication 510 (revised December 2025) in October 2026.

The 12% FET on a new truck deal sheet

EXAMPLE figures, not a quote. The FET is figured before state sales tax, and a separately stated state sales tax is not part of the FET base.

What the federal excise tax on semi trucks covers

The tax is set by 26 U.S.C. 4051 and explained in IRS Publication 510. It applies to the first retail sale of three kinds of articles, and to parts and accessories sold with them:

GVW here means the gross vehicle weight rating the maker or seller assigns, based on the frame and axles. Publication 510 also excludes four body types: platform bodies 21 feet or less, dry freight and refrigerated van bodies 24 feet or less, small dump bodies and small refuse packer bodies.

In practice, almost every new Class 8 tractor and full-size trailer is taxed. A 26 ft box truck usually is not, because its GVW is normally under 33,000 pounds.

Who pays the FET and how it is reported

The seller is liable for the tax and reports it to the IRS on Form 720, the quarterly federal excise tax return. You pay it as part of the price. Because the tax attaches to the sale, an installment sale or a loan does not spread it out: the full tax is figured on the whole price at the time of sale.

How the dealer figures the tax base

Publication 510 sets what goes into the 12%:

• Included: the full price you pay, including any trade-in allowance, and charges to put the truck in condition to use. Parts and accessories ordered with the truck, such as a fifth wheel or bumpers, are taxed too.
• Excluded: the FET itself, state or local sales tax when stated separately, and delivery, insurance and similar charges from the dealer to you.
• Exempt equipment: a qualifying idling reduction device, such as an EPA-verified auxiliary power unit, and insulation rated at least R35 per inch are not taxed.

The trade-in point surprises many buyers. A $30,000 trade-in lowers what you hand over, but it does not lower the FET, because the tax base is the total consideration, trade-in included.

The tire credit

New trucks ship on tires that already carried their own federal tire tax when the tire maker sold them. To avoid taxing them twice, the seller takes a credit equal to that tire tax against the FET. It is claimed on Form 720, Schedule C, and many invoices show it as a separate credit line under the FET.

Parts added in the first six months

If you install parts or accessories on a taxed truck within 6 months after it is placed in service, and they total more than $1,000 including installation, the 12% tax applies to all of them, not just the amount over $1,000. Replacement parts are not counted. Publication 510's example: $850 of parts in May and $300 in July means tax of $138 on the full $1,150 in July. Plan add-ons such as a headache rack or extra tanks with that window in mind.

Federal excise tax on used semi trucks

A used truck normally owes no FET, because the tax applies only to the first retail sale. Two exceptions matter to buyers:

• Heavy rebuilds. Repairs or modifications costing more than 75% of the retail price of a comparable new truck can make the rebuilt truck taxable again.
• Trailers resold within six months. A trailer resold within 6 months of a taxed sale is taxed again, with a credit for the tax already paid.

That is one reason a late-model used truck can cost much less out the door than a new one with a similar sticker. Our used semi truck guide covers the rest of a used purchase.

Leases and the FET

Leasing does not skip the tax. A lease of one year or more before the first retail sale is treated as a taxable sale, and a shorter lease as a taxable use. Either way the lessor owes the tax and prices it into the payments.

What the FET adds to a loan

EXAMPLE: financing the $20,400 of FET above for 60 months at an EXAMPLE 11.5% APR adds about $449 a month and about $6,500 in interest. See the full payment picture in how much a semi truck monthly payment runs, and if you are looking at taking over someone else's truck payments, remember the FET was already paid when that truck was new.

FET is not the heavy vehicle use tax

The FET is paid once, at the first sale. The heavy vehicle use tax is a separate yearly tax on highway vehicles with a taxable gross weight of 55,000 pounds or more, filed on IRS Form 2290. A loaded tractor-trailer usually owes both: the FET when new, and the 2290 every year.

For income tax, ask your tax professional how the FET fits into the truck's cost basis on your own return. Our truck depreciation calculator shows the depreciation schedules from IRS Publication 946, including the Section 179 deduction.

Has the 12% FET changed?

As of our check on October 29, 2026, the rate in 26 U.S.C. 4051 is still 12%. We will update this page if a change is enacted, and we recheck the statute and Publication 510 every January.

Once the truck is bought and taxed, the next job is keeping it busy. Our truck dispatch service books loads at rates that cover a new truck's payment.