Source: United States House of Representatives – Congressman Chris Pappas (D-NH)

Congressmen Chris Pappas (NH-01) and Doug LaMalfa (CA-01) reintroduced the Modern, Clean, and Safe Trucks Act which would repeal the 12% federal excise tax on heavy trucks. Representatives Darin LaHood (IL-16), Salud Carbajal (CA-24), and Max Miller (OH-07) joined in introducing this bipartisan legislation.

The 12% 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 is 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 older, less safe, and less fuel efficient vehicles.

“Every potential saving we can deliver to businesses makes a difference to help them operate and lower costs for families,” said Congressman Pappas. “Cutting the federal excise tax on heavy-duty trucks and trailers will help America’s Main Street economy grow and strengthen our supply chains, while also supporting the adoption of newer, safer, and cleaner trucks. This legislation is bipartisan and commonsense, and I’ll keep fighting for Congress to take it up to provide immediate relief to small businesses and consumers alike.”

“For over a century, the federal excise tax on heavy-duty trucks has gone from a temporary wartime measure to fund World War I, to an outdated tax that punishes truck buyers,” said Congressman LaMalfa. “This is the highest percentage-based tax Congress imposes on any product, yet it fails to be a reliable source of funding for the Highway Trust Fund. This tax forces buyers to stick with older, less efficient models and makes it harder for truckers to modernize their rigs, holding back the trucking industry from updating. Let’s repeal this outdated tax and support the men and women who keep America moving.”

This bipartisan legislation has the support of leaders across the industry. 

“First implemented over a century ago to help finance America’s effort in World War I, the FET has become the largest excise tax on any product, adding $24,000 to the cost of each new clean-diesel tractor-trailer,” said American Trucking Associations President & CEO Chris Spear.  “Keeping this antiquated tax on the books imposes an enormous hardship, particularly for the small fleets, family businesses, and independent truckers who make up the overwhelming majority of trucking.  Removing this burden will allow motor carriers to replace their trucks with modern, safer, and cleaner equipment, which will in turn provide a boost to manufacturing jobs.  Our industry is grateful to Reps. LaMalfa, Pappas, LaHood, Carbajal, and Miller for their leadership on this issue to improve highway safety, reduce emissions, and strengthen our economy.”

“The Clean Freight Coalition (CFC) is grateful to Reps. LaMalfa, Pappas, LaHood, Carbajal, and Miller for their leadership on repealing the FET, which will incentivize motor carriers to refresh their fleets with cleaner and safer trucks,” said CFC’s Executive Director Jim Mullen. “There are many pathways to reducing truck emissions, and replacing old equipment with trucks equipped with the most advanced technology provides immediate benefits for the environment, and at the same time protects the resiliency of the supply chain and guards against rising freight costs which are ultimately paid by consumers. The stakeholders represented by the CFC applaud the Sponsors of this bill for their efforts to improve the environment and support the trucking industry.”

“The burdensome 12 percent Federal Excise Tax on the sale of new heavy-duty trucks and trailers is an outdated levy which drives up costs and slows the adoption of safer, more fuel-efficient vehicles,” said Scott Pearson, ATD Chairman and President of Peterbilt of Atlanta. “This onerous tax adds approximately $20,000 to the price of a new diesel truck, and $50,000 to the cost of a new electric truck. America’s truck dealers commend Reps. LaMalfa and Pappas for their leadership on this important issue, which will help motor carriers modernize their fleets and improve road safety.”

“The U.S. tank truck industry needs relief from the outdated Federal Excise Tax—originally imposed more than a century ago to fund World War I,” said Ryan Streblow, President and CEO of National Tank Truck Carriers. “Repealing this 12% tax would empower our industry to reinvest in the specialized equipment we need—equipment that features critical safety enhancements and cleaner-emission power units to serve the U.S. bulk segment. As costs continue to rise, this tax remains a significant barrier to upgrading our fleets and supporting a safer, more sustainable supply chain.”

Background: 

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 twelve percent, and although it was set to expire in 1987 it was extended in 1987, 1991, 1998, 2005, 2012, and 2015.

Representatives Pappas and LaMalfa introduced similar legislation in the 117th Congress and the 118th Congress following a renewed appeal from the National Automobile Dealers Association. This legislation has received praise from New Hampshire small business leaders.

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