Trucking stakeholders applaud bill that would repeal truck tax

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Updated May 6, 2019

A bill introduced into the U.S. House is drawing praise from trucking industry groups for its attempt to repeal the federal excise tax (FET) levied on most new heavy-duty trucks and trailers.

“Modern, Clean and Safe Trucks Act of 2019″ – H.R. bill 2381 – was introduced by Rep. Doug LaMalfa (R-Calif.) and Rep. Collin Peterson (D-Minn.) to help roll back the 102-year-old tax that was originally created to help finance World War I. The 12 percent excise tax generally adds between $12,000 to $22,000 to the cost of a new truck purchase.

“The FET discourages truck buyers from purchasing the newest, safest and cleanest trucks and trailers available,” said Jodie Teuton, chairwoman of the American Truck Dealers (ATD) and Modernize the Truck Fleet (MTF) coalition steering committee member. “This tax is as outdated as biplanes and trench warfare.”

Congressman LaMalfa notes that in the century since the FET was introduced, it has quadrupled from 3 percent to 12 percent and that the inflated acquisition cost has chased would-be new truck customers out of the market.

“It’s an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner and safer vehicles. It’s also the highest percentage-based tax that Congress imposes on any product, and it’s not even a reliable source of funding for the Highway Trust Fund,” he says. “Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them. They’re far more likely to purchase used or older trucks with older technology that are not as fuel-efficient or don’t achieve the air quality goals the government demands. The FET limits truck replacement, the associated economic growth, and needs to be repealed.”

Peterson calls the FET “an outdated burden to small businesses looking to invest in our transportation industry,” and agrees that repealing it will encourage fleets to upgrade to newer, safer and more fuel-efficient vehicles.

Launched in January, the MTF coalition represents a broad collection of businesses in the trucking industry, including the American Truck Dealers, National Tank Truck Carriers, National Trailer Dealers Association, NTEA – the Association for the Work Truck Industry, Truck Renting and Leasing Association, and the Truck and Engine Manufacturers Association.

H.R. 2381 has been referred to the House Ways and Means Committee for further consideration. Over recent years, similar bills to repeal trucking’s FET have advanced through various stages before ultimately stalling out. In most cases, they were either tangled with other legislation or buried under a backlog of other matters.