Members are urged to cosponsor H. Con. Res. 52
Congress imposes a 12 percent federal excise tax (FET) on most new on-highway heavy-duty trucks, tractors and trailers (“heavy-duty trucks”). With the highway bill due to be reauthorized next year, raising the FET on heavy-duty trucks has been discussed. However, the FET on heavy-duty trucks is already the highest excise tax on a percentage basis Congress levies, and any increase in the FET by Congress will further depress new heavy-duty truck sales and delay the deployment of cleaner, safer, and more fuel economical trucks. H. Con. Res. 52 puts Congress on record in opposition to increasing the FET and asks Congress to consider lowering or eliminating it to address the detrimental impacts of the tax on the environment and the trucking industry.Background
The truck FET was originally imposed in 1917 to defray the cost of World War I. The tax has grown from 3 percent when it was incorporated into the Highway Trust Fund in 1955 to 12 percent today. This tax is in addition to the $30,000 in new federal emissions and fuel economy mandates on the books that when fully implemented will make it harder than ever for a small business to afford a new heavy-duty truck. An increase in the FET would further depress sales for these vehicles and delay cleaner, safer and more fuel efficient trucks from being deployed into the fleet.
This 12 percent tax and the new regulatory costs come at a time when truck sales are still recovering from the recession. In 2009, sales of commercial vehicles plummeted, with sales of the heaviest Class 8 trucks (over 33,000 lbs. Gross Vehicle Weight Rating) reaching their lowest levels since 1983. This drop in sales was the result of trucking companies postponing truck purchases due to the recession, high unemployment levels, and weak housing and construction markets.
With the highway bill due to be reauthorized in 2014, increasing the FET remains a distinct possibility. In April, the Senate Finance Committee released an “options paper” on infrastructure funding that contained a policy option of increasing the FET to 13 percent. On July 23, a Department of Transportation official testified before Congress that “clearly more revenues are needed” to address the shortfalls in the Highway Trust Fund. Lastly, a Government Accountability Office report noted that Congress should evaluate “increased revenues” on commercial trucking. Key Points
• The 12 percent FET on heavy-duty trucks is already the highest percentage rate of any federal excise tax. It would be unfair to raise this already burdensome tax even higher.Status
• An increase in the FET would depress new truck sales and would slow deployment of cleaner, safer, and more fuel efficient trucks into America’s trucking fleet.
• All heavy-duty trucks sold in the U.S. in 2012 were manufactured and assembled in North America. Increasing the FET would hurt the nearly 4 million Americans employed in the selling, servicing, manufacturing and operating of heavy-duty trucks.
H. Con. Res. 52 was introduced by Reps. Reid Ribble (R-WI) and Tim Walz (D-MN) on September 12, and referred to the House Ways and Means Committee for consideration.