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I have a question to ask the decision-makers in Washington: If the goal is to get more cleaner, greener trucks on the road, why does the federal government keep the 12% federal excise tax (FET) on the sale of a new truck?
This penalizes the purchase of new trucks by making them much more expensive, resulting in older trucks staying on the road longer.
The Environmental Protection Agency’s environmental policy goals are contradicted by the federal excise tax Congress has levied on heavy-duty trucks, which was implemented more than a century ago. This 105-year-old tax often adds as much as $22,000 to the price of a typical new heavy-duty truck. And, even more shocking, the FET can add upward of $50,000 to the price of an electric or hydrogen fuel-cell truck, since these vehicles are significantly more expensive than internal combustion engine trucks.
The EPA is now focused on mandating the building of cleaner trucks for the future. The EPA’s March 2022 proposal will further reduce nitrogen oxide (NOx) tailpipe emissions from medium- and heavy-duty trucks. Industry stakeholders share EPA’s goal to deploy cleaner trucks, but we must set achievable goals that will promote adoption.
Indeed, the trucking industry and EPA have worked together through a series of federal rule updates to achieve a 98% reduction in NOx and particulate matter emissions from commercial vehicles stretching back to the 1990s, per the Diesel Technology Forum.
Given this latest push for cleaner trucks, it is logical that EPA would want these cleaner trucks to be built, sold and then deployed onto our roadways. Yet half of the Class 8 trucks on the road now are more than 10 years old and lack the markedly cleaner technologies and fuel efficiency gains of today’s newer trucks.
One simple reason for this is the 12% FET, which is imposed on the buyer of a newer, cleaner truck. The FET makes no sense if Washington’s goal is to deploy more cleaner-emission trucks. For electric trucks, the FET is a counterproductive dead weight.
Instead of penalizing the purchase of a newer, cleaner truck, let’s incentivize it by repealing an outdated and onerous tax that flies in the face of today’s environmental goals and objectives. The newer trucks meet rigorous environmental standards and help make our air cleaner compared to the older trucks. Repealing the 12% FET would complement EPA’s mandates, not frustrate them.
This week, the American Truck Dealers is conducting an in-person fly-in in Washington. My fellow truck dealers will be meeting with senators and representatives asking Congress to support repeal of the FET. Specifically, we are asking for cosponsorship of S. 2435, the Modern, Clean and Safe Trucks Act of 2021, a bipartisan bill to repeal the FET that was introduced by Sens. Todd Young (R-Ind.) and Ben Cardin (D-Md.). We also expect a companion House bill to be introduced shortly.
It’s time for Congress to repeal the FET and to advance the deployment of newer, greener trucks, that will lead us toward an advanced technology and zero-emission future.
Scott McCandless is president of McCandless Truck Center in Aurora, Colo., and American Truck Dealers chairman.
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