House Lawmakers Propose 12% Excise Tax Repeal

Kenworth lot
New trucks on a lot. (Kenworth)

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Legislation to repeal a tax on the purchase of new trucks was introduced in the U.S. House of Representatives.

Reps. Doug LaMalfa (R-Calif.) and Chris Pappas (D-N.H.) on March 8 unveiled a bipartisan measure targeting the World War I-era tax on new trucks. The measure would specifically undo this 12% excise tax on heavy-duty vehicles and trailers.

“On one hand, regulators want operators out of older trucks, but on the other hand, this tax penalizes them for trying to update their equipment. Repealing the 12% federal excise tax on heavy trucks and trailers will help all businesses reduce costs, address supply chain challenges and lower costs for essential goods for families, especially in rural areas,” said LaMalfa, a member of the Transportation and Infrastructure Committee.

“The federal excise tax has outlived its original purpose by more than a century,” he added. “Truckers are an essential cornerstone in our supply chain, yet the tax code disincentivizes them from purchasing the most up-to-date equipment.”

“Cutting the federal excise tax on heavy trucks and trailers will help America’s Main Street economy grow, address supply chain challenges and shortages, and lower costs for essential items that families need, including groceries and gas,” added Pappas, who also serves on the transportation committee. “This legislation will also support the adoption of newer, safer and cleaner trucks that reduce our dependence on foreign energy.”

The bill’s introduction came shortly after freight stakeholders renewed calls for the tax’s repeal. In a statement accompanying the bill’s introduction, American Trucking Associations President Chris Spear emphasized, “The federal excise tax was created more than 100 years ago to finance the nation’s efforts in the first World War. Today, it serves as a nearly $25,000 barrier to putting safer, more environmentally friendly trucks on the road.”

Reps. Doug LaMalfa (R-Calif.), left, and Chris Pappas (D-N.H.)

Reps. Doug LaMalfa (R-Calif.), left, and Chris Pappas (D-N.H.) 

Spear continued, “I want to thank Rep. Doug LaMalfa, along with Reps. Chris Pappas, Earl Blumenauer (D-Ore.) and Darin LaHood (R-Ill.) for their leadership. If Congress is serious about creating jobs, reducing emissions and improving highway safety, then repealing the [federal excise tax] should be a top priority.”

Recently, ATA, along with American Truck Dealers and the Zero Emission Transportation Association, urged lawmakers to undo the long-standing tax.

According to industry estimates, the federal excise tax has the potential for adding about $50,000 to the price of new low- or zero-emission heavy-duty vehicles.

“As the heavy-duty vehicle industry looks to modernize fleets and meet more stringent fuel economy standards, the federal tax structure needs to evolve to reflect the rapidly changing infrastructure and heavy-duty vehicle markets,” the groups wrote congressional leaders Feb. 22. “The federal excise tax on heavy-duty trucks is an outdated revenue source that disproportionately burdens small businesses and dampens demand for emerging technologies like electric vehicles. We urge you to repeal the [federal excise tax] for heavy-duty vehicles and equipment to deploy clean trucks and modernize the truck fleet.”

The group’s letter was directed at Senate Leader Chuck Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker Kevin McCarthy (R-Calif.) and House Minority Leader Hakeem Jeffries (D-N.Y.).

Chris Spear

ATA President Chris Spear delivers opening remarks to the House panel Feb. 1. (Committee on Transportation and Infrastructure)

At a congressional hearing last month, Spear shared with lawmakers the industry’s pushback on the tax. “Mandates for emissions reduction and decarbonization will require the widespread deployment of new, cleaner or alternative-fuel vehicles that are significantly more expensive, and which are not yet widely available. The antiquated federal excise tax on heavy-duty vehicles, created by Congress to fund America’s participation in World War I, adds an additional 12% to the cost of every new truck,” Spear said in a statement to the Senate Environment and Public Works Committee Feb. 15. “If Congress is serious about reducing emissions from trucking and the supply chain, then the first step is to remove this onerous tax and immediately make new, clean equipment more affordable.”

In recent years, ATA teamed up with industry groups to urge congressional action on the tax. Emerging technologies related to cleaner or alternative-fuel vehicles are seen as instruments and tools for emissions reduction as well as decarbonization.

During the previous session of Congress, House lawmakers and Sens. Todd Young (R-Ind.) and Ben Cardin (D-Md.), introduced the Modern, Clean, and Safe Trucks Act. That legislation, which would have repealed the 12% tax, did not reach the president’s desk for enactment.

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