Critics of the federal excise tax say it discourages the purchase of newer, lower-emission trucks.

Critics of the federal excise tax say it discourages the purchase of newer, lower-emission trucks.

Photo: Daimler Truck North America/ACT Expo

A bill introduced in the U.S. House of Representatives would repeal the Federal Excise Tax on heavy trucks and trailers.

Rep. Chris Pappas from New Hampshire (D-N.H.) and Rep. Doug LaMalfa (R-Calif.) on June 16 introduced the Modern, Clean, and Safe Trucks Act of 2022. This bipartisan legislation would repeal the 12% FET.

A similar Senate bill (S. 2435) was introduced last year by Sen. Todd Young (R-Ind.) and Sen. Ben Cardin (D-Md.).

The FET was first enacted in 1917 to help pay for World War I, according to the American Truck Dealers association, which supports the bill. The tax is the highest excise tax on a percentage basis that Congress levies on a product, often adding as much as $22,000 to the price of a new heavy-duty truck, and as much as $50,000 to the price of an electric or hydrogen fuel-cell truck, given the higher price tag for these vehicles.

It's not the first time there's been an attempt to repeal the burdensome FET but today's focus on supply chain problems and emissions brings new urgency.

“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 in a news release. “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.”

He pointed out that repealing the FET also would “facilitate the adoption of newer, safer, and greener trucks and reduce our dependency on foreign energy sources.”

“We need new and more environmentally friendly trucks deployed on our roadways,” said Scott McCandless, ATD chairman and president of McCandless Truck Center. “Half of the Class 8 trucks on the road are over 10 years old and lack the cleaner technologies and fuel efficiency gains of today’s new trucks. The FET is a barrier to our national goal to put more cleaner-emission trucks in service. For electric trucks, the FET is a counterproductive dead weight.

“Eliminating this outdated and punitive tax will spur turnover of our aging truck fleet and curb emissions. We must put an end to this tax that slows the deployment of new more environmentally friendly trucks.”

Saying the FET has outlived its original purpose by more than a century, LaMalfa added, “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… we should drop the burdensome tax preventing our truck drivers from having the most modern, highest technology and safest equipment on the road.”

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