LaMalfa, Pappas introduce bill to repeal federal excise tax on heavy trucks

Congressman Doug LaMalfa and Congressman Chris Pappas introduced legislation repealing the 12 percent federal excise tax on heavy trucks. The excise tax on heavy trucks is the highest excise tax levied by the federal government, and could add more than $30,000 to the cost of new heavy trucks, trailers, semitrailer chassis and tractors for highway use. Off-highway equipment such as agriculture, earthmoving, forestry and mining machinery are exempt from the tax. This tax is paid at the time of sale and is not levied on used truck sales, consequentially encouraging the purchase of used vehicles.

For more than a century, the federal government has levied excise taxes on heavy duty trucks to raise money for wartime mobilization in WW1 and WW2, fund Great Depression-era programs and for the Highway Trust Fund. The Senate previously attempted to repeal the tax in 1975, but the House failed to include it in their version of a broad tax bill. It was last increased in 1982 to 12 percent, and although it was set to expire in 1987 it was extended in 1987, 1991, 1998, 2005, 2012, and 2015.

“The federal excise tax has outlived its original purpose by more than a century,” LaMalfa said. “Between Sacramento and Washington, truckers have dozens of regulations on emissions and safety to follow. However, at the same time, our tax code disincentivizes them from purchasing the most up-to-date trucks, with the federal excise tax adding as much as $30,000 by itself. With American producers and consumers shipping more than ever, we should drop the burdensome tax preventing our truck drivers from having the most modern, highest technology and safest equipment on the road.”

“As a small business owner, I’ve seen firsthand just how challenging it can be to operate a business, especially when costs rise,” said Pappas. “This is a time when we must do all we can to lower costs for small businesses and consumers and 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 like groceries and gas. Not only will cutting this tax help small businesses and ensure we can transport more goods across the country, but it will also facilitate the adoption of newer, safer, and greener trucks and reduce our dependency on foreign energy sources. I urge leaders in Congress to take up this bipartisan bill to provide immediate relief to small businesses and consumers alike.”