House Committee Hears Arguments on Excise Tax Repeal

Proponents Say One Benefit Would Be Modernized Fleets
new trucks
The bill’s sponsors argue that currently the excise tax potentially adds $15,000 to $30,000 to the cost of new heavy trucks. (Rechtien International Trucks)

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The repeal of a tax on the purchase of new trucks was discussed during a recent hearing in the U.S. House of Representatives.

Rep. Chris Pappas (D-N.H.) informed the tax-writing Ways and Means panel this month about the repeal of the long-standing 12% federal excise tax. Earlier this year, Pappas led the bipartisan introduction of the Modern, Clean and Safe Trucks Act of 2023.

“Not only will repealing this federal excise tax deliver upfront cost savings for truckers and small businesses but it will also provide downstream supply chain and cost saving benefits for consumers. This legislation will also support the adoption of newer, safer and cleaner trucks that lower greenhouse gas emissions and reduce our dependence on foreign energy,” Pappas told the committee on Sept. 14 in a letter obtained by Transport Topics. He further emphasized a repeal of the World War I-era tax would help modernize commercial vehicles industrywide.

The bill’s sponsors argue that currently the excise tax potentially adds $15,000 to $30,000 to the cost of new heavy trucks. The Republican-led Ways and Means Committee has not scheduled a vote on the measure.

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

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

“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,” explained Rep. Doug LaMalfa (R-Calif.), a co-sponsor. “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. The federal excise tax has outlived its original purpose by more than a century. Truckers are an essential cornerstone in our supply chain, yet the tax code disincentivizes them from purchasing the most up-to-date equipment.”

“I’m urging Congress to support this common-sense, bipartisan bill, and drop the burdensome tax preventing our truck drivers from having the most modern, highest technology and safest equipment on the road,” LaMalfa added.

Companion legislation in the Senate also has not been considered in committee. Sens. Ben Cardin (D-Md.) and Todd Young (R-Ind.) are the lead sponsors of the Senate version of the Modern, Clean and Safe Trucks Act of 2023.

“The current federal excise tax has become a barrier to our progress in encouraging cleaner and greener technology,” Cardin said in March. “I am proud to support tax policy that enables Maryland manufacturers to innovate and deploy cleaner and safer technologies in our trucking industry. Our legislation will spur growth and competitiveness while making our roads safer and less polluted.”

The repeal of the excise tax is a priority for a group of key freight stakeholders. American Trucking Associations with the Clean Freight Coalition recently renewed its push for the repeal of the excise tax on new commercial trucks.

Doing so, the groups argued, would facilitate the introduction of more energy efficient equipment in the commercial transportation marketplace.

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“As federal agencies consider the opportunities and costs related to additional truck safety equipment mandates, repealing the [federal excise tax] will lower prices for end users who typically pay higher prices than the isolated costs of specific components when federal requirements change, and thus speed the deployment of these valuable technologies on our nation’s highways,” the groups wrote the congressional tax-writing committees this summer.

The groups also affirmed, “Stakeholders across the trucking supply chain stand ready to work with those champions and other leaders in Congress to advance this important proposal.”

Clean Freight Coalition members include ATA, American Truck Dealers, Natso, the National Motor Freight Traffic Association, the National Tank Truck Carriers and Truckload Carriers Association.