WASHINGTON—The International Tire & Rubber Association is urging its members to contact members of two Senate committees to state their opposition to eliminating the federal excise tax (FET) on new truck tires. Meanwhile, Sen. John Chafee, R-R.I., plans to remove a provision repealing the truck tire FET from his Highway Tax Equity and Simplification Act, a staff person on the Senate Environment and Public Works Committee, which Mr. Chafee chairs, said.
``We haven't made our final decision, but that's the direction in which we're headed,'' he said.
The Chafee bill would establish a national weight-distance tax for the trucking industry, which means the old truck taxation system would be scrapped in favor of a method taxing trucks on their registered weight and miles traveled.
As it now stands, the bill contains an FET repeal. Retreaders fear that the loss of the tax would have a negative impact on their business.
``It would bring the price of new tires and retreads much closer, and there is a strong possibility that many small retreaders and suppliers to the industry could be put out of business,'' ITRA said in a press release.
Because imported tire casings are taxed the same as new tires, the association said, removing the FET also could open the door to unrestricted importation of casings and retreads ``that may not have been produced under any quality standards.''
While Sen. Chafee introduced the bill to the Senate Finance Committee, he may also try to have a hearing on it scheduled in Environment and Public Works, ITRA said.
All ITRA members ``and others with an interest in the future of the tire retread and repair industry'' should play it safe and write letters opposing the bill to all members of both committees, ITRA said.
As of Sept. 7, neither committee had scheduled a hearing on the Chafee bill.