Increasing the Excise Tax on Heavy-Duty Trucks Will Hurt Small Business

Members Are Urged to Cosponsor H.Con.Res. 52  

Congress imposes a 12 percent federal excise tax (FET) on most new heavy-duty trucks.  Raising the FET on heavy-duty trucks would depress new heavy-duty truck sales and delay the deployment of cleaner, safer, and more fuel economical trucks.  With the highway bill due to be reauthorized next year, Congress should support H. Con. Res. 52, a concurrent resolution which opposes an increase in the FET.

The truck FET was originally imposed in 1917 to defray the cost of World War I.  The tax on highway heavy-duty trucks, tractors, and trailers has grown from 3 percent when it was incorporated into the Highway Trust Fund in 1955 to 12 percent today.  The FET on heavy-duty trucks is already the highest excise tax on a percentage basis Congress levies.  This tax is in addition to the $30,000 in new federal emissions and fuel economy mandates that when fully implemented will make it even harder for small businesses to afford a new heavy-duty truck. 

With the highway bill due to be reauthorized in 2015, increasing the FET remains a distinct possibility.  In 2013, the Senate Finance Committee released an “options paper” on infrastructure funding that contained a policy option of increasing the FET to 13 percent.  Additionally, testimony from the Department of Transportation noted that “clearly more revenues are needed” to address the shortfalls in the Highway Trust Fund, and a 2013 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.
• 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 2013 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, 2013 and referred to the House Ways and Means Committee.  The bill currently has 18 bipartisan cosponsors.  Members of Congress are urged to cosponsor H.Con.Res. 52.

September 2014