FET

The Federal Excise Tax (FET) is a tax on tires that the manufacturer pays and then passes the charge down the supply chain and the consumer ultimately ends up paying for it in the end. The tax is not remitted by the installer as the tax was already paid to the government by the manufacturer. However, it should be detailed on the invoice to the consumer. The FET, itself, is not taxable.

Create an Expense Account for FET

Create an expense account for FET charges using the instructions in the Enteprise/Setup Manager.

Creating Inventory with FET

To create a material item that has an FET charge, create it using the normal method but put the value of the FET at the end of your description. The cost of the tire does not include the FET portion. E.g.  Description: 22:00R7.50 Highway Scrambler (FET = $12.50)

Receiving Materials with FET

• Receive the tire to inventory or on a work order and do not add the FET charge to the cost.
• On the Supplier Invoice in Purchases, add the FET charge as an expense to the account you set to record FET charges.
• Post the Supplier Invoice to Payable as per normal.

Selling FET on an Invoice

On any tire service packages where FET is possible:

• Add a labor line item with FET as the description and set the pricing to fixed amount but leave it at zero dollars
• In the charges tab, make sure the labor line is non-taxable.
• Set the formatting information to not display the hours or rate
• Add the service package to the work order and source the tire as per normal from inventory or supplier.
• Update the labor line item and change the FET to the amount being charged.
• If no FET is being charged you can remove the labor line item from the service package.

Adjusting Sales (Optional)

If you would like the FET sales to be in a different category than tires/labor, then you would do a GL Adjustment at the end of each month to move the FET sales to a revenue account of your choice.

• Run the Line Item Sales by Contact in the .NET Report Manager to get the FET sales totals.
• Enter a GL Adjustment dated at the end of the month subtracting the FET sales amount from labor in the appropriate service categories and adding to the revenue account of your choice.