Bill Aims to Repeal Federal Excise Tax on Heavy-Duty Trucks

Federal Excise Tax adds 12% to the purchase price of every new truck, discouraging investment in fuel efficient clean truck technology.

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The  Federal Excise Tax on heavy-duty trucks was  initially around 3% and was intended to pay for the cost of World War I. Over the years it has grown to 12% and often adds between $12,000 - $22,000 to the cost of a new truck purchase.

The recently introduced bill, H.R. 2381, or the “Modern, Clean and Safe Trucks Act of 2019,” was introduced this week in the House by Rep. Doug LaMalfa (R-CA), with original co-sponsors Reps. Collin Peterson (D-MN), Tom O’Halleran (D-AZ), Greg Pence (R-IN) and Henry Cuellar (D-TX) in an effort to kill the FET.

“When the FET was introduced over 100 years ago, it was to help pay the costs of fighting World War I," says Doug LaMalfa. "Today, it has quadrupled from 3% to 12% and the Ottoman Empire is no longer around. It’s an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner, and safer vehicles. The FET is also the highest percentage-based tax that Congress imposes on any product, and it’s not even a reliable source of funding for the Highway Trust Fund. Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them. They’re far more likely to purchase used or older trucks with older technology that are not as fuel-efficient or don’t achieve the air quality goals the government demands. The FET limits truck replacement, the associated economic growth, and needs to be repealed.”

Collin Peterson adds, "The Federal Excise Tax is an outdated burden to small businesses looking to invest in our transportation industry. Repealing this tax would encourage new, and cleaner fuel-efficient vehicles on our roads.”

“The FET discourages truck buyers from purchasing the newest, safest, and cleanest trucks and trailers available,” says Jodie Teuton, Chairwoman of the American Truck Dealers (ATD) and Steering Committee member of Modernize the Truck Fleet.  “This tax is as outdated as biplanes and trench warfare.  MTF applauds the bipartisan leadership Reps. Peterson and LaMalfa have shown by introducing this bill.  MTF urges Members of Congress to cosponsor H.R. 2381 to repeal the FET, which will help turnover the truck fleet and put newer, more fuel-efficient and safer trucks on the road.”


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