New Bill Puts Brakes on Trucking Tax Increase

by Jana Ritter - Published: 9/13/2013

Legislation was introduced this week in the House of Representatives opposing increases in the 12 percent federal excise tax (FET) on new heavy-duty trucks and trailers and encouraging Congress to review the negative impacts of the existing tax. 

The bill noted that increasing the FET would significantly increase the cost of new heavy-duty trucks and keep “older, less environmentally clean and less fuel-economical heavy-duty trucks in service longer.” The bill also cited a 2010 National Academy of Sciences report which said fuel economy rules will add an average of $10,000 to $15,000 to the price of new, heavy-duty trucks.

The legislation added that combined, regulatory mandates governing emissions and fuel efficiency add $30,000 on average to the cost of a new truck and result in an additional $3,600 federal excise tax. The bill also said lane departure, stability and similar technologies would be slowed if the FET were increased.

The response was immediate from the trucking industry.

The Truck Renting and Leasing Association (TRALA) said it supported the bill as part of its “ongoing efforts to prevent unnecessary federal mandates that further increase the cost of purchasing and leasing trucks and trailers.”  Further, it said that while it “supports a robust, well-funded Highway Trust Fund (HTF), the FET on trucks and trailers are an ineffective and volatile means of funding the HTF.  “The availability of FET monies to fund the Highway Trust Fund is closely tied to the economy and cycles in truck and trailer purchasing.  This results in an unpredictable flow of funds into the HTF, which is detrimental to many road and bridge construction planning processes.”

The American Truck Dealers (ATD) and a Massachusetts International and Ford truck dealer also supported the bill in the following statement:

“The existing 12 percent levy on heavy duty trucks is already the highest excise tax imposed by Congress on a percentage basis. The FET adds thousands of dollars to a commercial truck that already costs well over $100,000. With a highway bill and comprehensive tax reform on the agenda in Washington, H. Con. Res. 52 sends a clear message to Congress that hiking the FET on commercial trucks should not be on the table. Since all the heavy-duty trucks sold in the U.S. in 2012 were manufactured in North America, increasing the FET would hurt the 3.65 million Americans employed in the selling, servicing, manufacturing and operating of these vehicles. ATD applauds the leadership of Representatives Ribble and Walz to fight against increasing this tax.”

Ribble added, “The federal excise tax deters business owners and other employers from purchasing some of the safest, cleanest and most fuel-efficient trucks available today. I hope my colleagues will agree that this tax should not be increased.”

Walz said “The trucking industry creates good-paying American jobs for countless folks across this country. Increasing this tax would further discourage hardworking business owners from purchasing new trucks that are safer, more efficient and better for our environment. At a time when our economy is still continuing to recover, we should be doing all we can to ensure businesses have the tools they need to be successful, instead of creating roadblocks to their growth.”