U.S. Reps. Doug LaMalfa (R-CA) and Chris Pappas (D-NH) reintroduced legislation repealing the 12 percent federal excise tax on heavy trucks, the legislators announced Wednesday.
The legislation would eliminate the tax on heavy trucks that has been in place for more than a century, the Congressmen said. The highest excise tax levied on any product in the country, it adds $15,000 to $30,000 to the cost of new heavy trucks, trailers, semitrailer chassis and tractors for highway use, they said. Paid at the time of sale, and not levied on used truck sales, the tax discourages the purchase of new vehicles, the law makers said.
“On one hand, regulators want operators out of older trucks, but on the other hand, this tax penalizes them for trying to update their equipment,” LaMalfa said. “Repealing the 12% Federal excise tax on heavy trucks and trailers will help all businesses reduce costs, address supply chain challenges, and lower costs for essential goods for families, especially in rural areas. The Federal excise tax has outlived its original purpose by more than a century. Truckers are an essential cornerstone in our supply chain, yet the tax code disincentivizes them from purchasing the most up-to-date equipment.”
Originally passed to raise money during World War I and World War 2, the Great Depression and for the Highway Trust Fund, the bill was set to expire in 1987. However, Congress extended the tax in 1987, 1991, 1998, 2005, 2012 and 2015. LaMalfa and Pappas introduced similar legislation in the last Congress. Now the two are joined by U.S. Reps. Darin La Hood (R – Ill.) and Earl Blumenauer (D-Ore.) to reintroduce the legislation.
“As a small business owner, I know just how challenging it can be to operate a business, and every potential saving we can deliver makes a difference,” Pappas said. “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, including groceries and gas. This legislation will also support the adoption of newer, safer, and cleaner trucks that reduce our dependence on foreign energy.”
The legislation is supported by the American Trucking Associations and the American Truck Dealers.
“Nearly half of America’s trucking fleet is over 10 years old,” said Scott McCandless, chairman of ATD and president of McCandless Truck Center LLC in Aurora, Colo. “Repealing the FET will be a giant step toward achieving our national goal of turning over America’s aging truck fleet.”