Proposed Bill Would Eliminate Equipment Tax that Feeds Highway Trust Fund

The Modern, Clean and Safe Trucks Act of 2019, would repeal the 12% federal excise tax on heavy commercial trucks and trailers, which feeds the Highway Trust Fund

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Rep. Doug LaMalfa, R-CA and Rep. Collin Peterson, D-MN have introduced H.R. 2381, the Modern, Clean and Safe Trucks Act of 2019 that would repeal the current 12 percent federal excise tax or FET on heavy commercial trucks and trailers. Though monies generated by the FET tax goes into the Highway Trust Fund, Rep. LaMalfa called that revenue “unreliable” since the high price of new trucks and trailers makes sales “inconsistent” year-to-year.

On average, he said the FET adds between $12,000 to $22,000 to the final sale price of a new truck.

“Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them,” he said in a statement. “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 – the highest percentage-based tax that Congress imposes on any product – limits truck replacement, the associated economic growth, and needs to be repealed.”

Previous analysis of Highway Trust Fund revenues showed that revenue from retail truck taxes reached only $3.117 billion in fiscal 2017, down by 27 percent or $1.148 billion; a drop that was more than enough to offset the relatively small gains from motor fuel user fees.

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