Congressmen Doug LaMalfa and Chris Pappas (reintroduced legislation to repeal the 12 percent federal excise tax on heavy trucks. The 12 percent excise tax on heavy trucks is the highest excise tax levied on any product in the country, and could add $15,000 to $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 WW I and WW II, 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.
LaMalfa and Pappas previously introduced a similar piece of legislation last Congress, and are joined by Representatives Darin LaHood and Earl Blumenauer to reintroduce the proposal following a renewed appeal from the National Automobile Dealers Association.
“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,” LaMalfa said. “Repealing the 12 percent 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.”
“As a small business owner, I know just how challenging it can be to operate a business, and every potential saving we can deliver makes a difference,” said Pappas. “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. This legislation will also support the adoption of newer, safer, and cleaner trucks that reduce our dependence on foreign energy. I urge leaders in Congress to take up our bipartisan bill, and act to provide immediate relief to small businesses and consumers alike.”
“Nearly half of America’s trucking fleet is over 10 years old,” said Scott McCandless, Chairman of ATD and President of McCandless Truck Center LLC of Aurora, Colo. “Repealing the FET will be a giant step toward achieving our national goal of turning over America’s aging truck fleet.”
“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,” said ATA President and CEO Chris Spear. “I want to thank Congressman Doug LaMalfa, along with Representatives Chris Pappas, Earl Blumenauer and Darin LaHood for their leadership. If Congress is serious about creating jobs, reducing emissions and improving highway safety, then repealing the FET should be a top priority.”