U.S. Sens. Ben Cardin (D-MD) and Todd Young (R-IN) introduced legislation last week that would repeal the federal excise tax (FET) on heavy trucks and trailers.
Established more than 100 years ago, the FET was enacted to pay for World War I. The current 12 percent FET is the highest percentage excise tax levied on any product but remains an unpredictable and minimal source of revenue for the Highway Trust Fund. The Senators also said the tax discourages private investment into cleaner, safer, and more modern truck fleets.
“Our tax policy is one of the most effective ways Congress can encourage cleaner and greener technology. The current federal excise tax has become a barrier to the progress,” Cardin said. “I am proud to support Maryland manufacturers in their efforts to innovate and deploy cleaner and safer technologies in our trucking industry. Our legislation will spur growth and competitiveness while making our roads safer and less polluted.”
According to the Senators, the 12 percent FET adds between $12,000 and $22,000 to the cost of new heavy trucks, tractors, or trailers. With more than half of the Class 8 trucks on the road over 10 years old, the FET is stifling investment in new trucks, despite significant improvements to carbon dioxide reductions and fuel efficiency, they said.
The legislation is supported by trucking industry groups.
“On behalf of the trucking industry, we thank Sen. Young and Sen. Cardin for their bipartisan legislation to repeal the FET, which will result in cleaner, safer trucks on the road,” said Steve Bassett, ATD chairman and dealer principal of General Truck Sales in Muncie, Ind. “With most heavy-duty trucks over ten years old, passing this bill is crucial to help America modernize its aging truck fleet.”