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Bipartisan legislation intro'd again to repeal excise tax on trucks

Updated Jun 22, 2022

Trucking news and briefs for Thursday, June 16, 2022:

For the second time in the last 12 months, Congress has introduced legislation that would repeal the 12% federal excise tax (FET) on heavy trucks.

On Thursday, Reps. Doug LaMalfa (R-California) and Chris Pappas (D-New Hampshire), introduced the Modern, Clean and Safe Trucks Act of 2022. A similar Senate bill was introduced last year by Sens. Todd Young (R-Indiana) and Ben Cardin (D-Maryland), but it never advanced past the Committee on Finance.

The excise tax on heavy trucks, which was first enacted in 1917 to help pay for World War I, is the highest excise tax levied by the federal government and could add more than $30,000 to the cost of new heavy trucks, trailers, semitrailer chassis and tractors for highway use, according to a press release from bill sponsor LaMalfa. Off-highway equipment such as agriculture, earthmoving, forestry and mining machinery are exempt from the tax. This tax is paid at the time of sale and is not levied on used truck sales, consequentially encouraging the purchase of used vehicles.

It was last increased in 1982 to twelve percent, and although it was set to expire in 1987 it was extended in 1987, 1991, 1998, 2005, 2012 and 2015.

“The federal excise tax has outlived its original purpose by more than a century,” LaMalfa said. “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, with the federal excise tax adding as much as $30,000 by itself.”

The American Truck Dealers (ATD) applauded the bill’s introduction.

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