WASHINGTON – The National Automobile Dealers Association and American Truck Dealers led a successful effort to exempt Auxiliary Power Units (APUs) from the 12 percent federal excise tax (FET), according to the ADT Insider.

The repeal of the tax on APUs was signed into law recently by President Bush. APUs, which allow truck drivers resting off-highway to turn off their main engines, save a lot of fuel and reduce emissions.

“APUs provide both sound environmental and cost-saving benefits," said Gary Gibson, ATD chairman. “Eliminating a tax on these fuel-saving devices makes good common sense.”

The new law applies to sales or installations of APUs after Oct. 3, 2008. Therefore, dealers are no longer required to collect the FET on APUs effective Oct. 4, 2008.

“This legislation will benefit the many truck dealers who have been increasingly burdened with this collection issue as the demand for APUs has increased,” Gibson said.

In 2007, the Internal Revenue Service directed truck dealers to begin collecting a federal excise tax on APUs.