ATA Continues Push for Excise Tax Repeal on New Trucks

The average heavy-duty truck operating on U.S. roadways is more than a decade old, according to the bill’s sponsors. (THEPALMER/Getty Images)

As House lawmakers prepare to consider a comprehensive surface transportation reauthorization bill later this month, American Trucking Associations renewed its push for repeal of the federal excise tax on the sale of heavy-duty trucks and trailers.

Speaking with Transport Topics, David Bauer, ATA vice president of state and tax policy, pressed transportation leaders on Capitol Hill to eliminate the World War I-era levy, which he described as outdated and punitive to the trucking industry.

“The time is now ripe,” Bauer said. “This is over a century where we are being singled out.”

During the current congressional session, lawmakers introduced the bipartisan Modern, Clean, and Safe Trucks Act, which would repeal the 12% federal excise tax on certain new heavy-duty trucks, tractors and trailers. Congressional leaders have not scheduled the measure for consideration.

Bill sponsors say the tax can potentially add between $15,000 and $30,000 to the purchase price of a new truck. The excise tax is assessed at the time of sale and does not apply to used trucks, a structure that advocates say discourages fleet turnover and incentivizes the continued use of older, less fuel-efficient vehicles.

The average heavy-duty truck operating on U.S. roadways is more than a decade old, according to the bill’s sponsors. New trucks are equipped with advanced safety technologies and cleaner engines that significantly reduce emissions.

“Every potential saving we can deliver to businesses makes a difference to help them operate and lower costs for families,” said Rep. Chris Pappas (D-N.H.), a member of the Transportation and Infrastructure Committee, when the bill was unveiled last year. “Cutting the federal excise tax on heavy-duty trucks and trailers will help America’s Main Street economy grow and strengthen our supply chains, while also supporting the adoption of newer, safer, and cleaner trucks.”

In a statement accompanying the bill’s introduction, ATA President Chris Spear said the excise tax has become the largest levied on any consumer product.

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Spear. (Karen Foote/American Trucking Associations)

“First implemented over a century ago to help finance America’s effort in World War I, the FET has become the largest excise tax on any product, adding $24,000 to the cost of each new clean-diesel tractor-trailer,” Spear said, adding that retaining the tax places a disproportionate burden on small fleets, family-owned businesses and independent owner-operators, which make up a significant segment of the industry.

“Removing this burden will allow motor carriers to replace their trucks with modern, safer and cleaner equipment, which will in turn provide a boost to manufacturing jobs,” he continued.

Groups backing repeal include the National Automobile Dealers Association. In background materials released earlier this year, the association said 22% of Class 8 trucks in operation use pre-2010 engines and that repealing the excise tax would accelerate replacement with cleaner and more fuel-efficient equipment.

The House Transportation and Infrastructure Committee is expected to vote on its multiyear highway bill before Memorial Day. Committee leaders have not disclosed whether the legislation will include provisions addressing repeal of the excise tax.

Identifying long-term funding solutions for federal transportation programs remains a central challenge in the highway bill debate. The Highway Trust Fund continues to face shortfalls due to insufficient revenue from federal fuel taxes, which have not been increased since 1993.