ATD Legislative Priorities

Support Repeal of the Federal Excise Tax (FET) on New Heavy-Duty Trucks (H.R. 2381/S. 1839)

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It’s been 101 years…
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Congress should repeal the FET
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Congress imposes a 12 percent federal excise tax (FET) on the sale of most new heavy-duty trucks. This tax often adds as much as $22,000 or more to the price of a new heavy-duty truck. The FET depresses new heavy-duty truck sales and delays the deployment of cleaner, safer and more fuel-efficient trucks. This burdensome tax is in addition to the nearly $40,000 in recent federal emissions and fuel-economy mandates that will make it harder for small businesses to afford a new heavy-duty truck. 


☛  Related article: The Trucker: ATD Calls On Congress to Repeal Federal Excise Tax on HD Trucks


The FET is a complex and difficult tax to administer, and truck dealers incur considerable costs navigating IRS regulations and paperwork associated with collecting this retail tax. Additionally, since the FET is based on annual sales, which can vary greatly, the tax also fails to provide certainty to the highway trust fund (HTF), where its revenue is deposited. This excise tax has been the most inconsistent source of revenue for the HTF over the past twenty years. Congress should include H.R. 2381/S. 1839, a bill that would repeal the FET, in a potential infrastructure bill to end this onerous tax that hampers economic growth. Enactment of this bill would directly benefit the 7.4 million Americans employed in trucking-related jobs. Members are urged to cosponsor H.R. 2381/S. 1839 to spur new truck sales and promote the entry of cleaner and safer trucks to modernize the trucking fleet.

Rep. Doug LaMalfa (R-Calif.) speaks on House floor
in support of FET repeal.



➢   Issue Brief: “Modernize the Truck Fleet by Repealing the Federal Excise Tax on Heavy-Duty Trucks, Members Are Urged to Cosponsor H.R. 2381/S. 1839”
➢   Bill Text for H.R.2381 – the Modern, Clean, and Safe Trucks Act of 2019
➢   Cosponsors of H.R. 2381 – the Modern, Clean, and Safe Trucks Act of 2019
➢   Reps. LaMalfa (R - Calif.) and Peterson (D-Minn.) 'Dear Colleague Letter' in support of H.R. 2381 - April 2019
➢   Transport Topics: Repeal the FET to 'Modernize the Truck Fleet' by Jodie Teuton, ATD Chairwoman - June 2019


New ATD Video Highlights the Need to End the FET on Heavy-Duty Trucks

The outdated federal excise tax (FET) adds tens of thousands of dollars to the cost of a new heavy-duty truck, while keeping older, less safe and less fuel-efficient ones on the road longer, the American Truck Dealers (ATD) says in a new video calling for repeal of the tax.

“Congress originally passed the FET for one purpose: to fund World War I in 1917. More than 100 years later and the tax is not only still with us, but it has increased from 3 to 12 percent,” the video says. “And because truck sales can be hot or cold depending on the economy, it’s the most volatile source of federal revenue to the Highway Trust Fund.”

The FET is the highest percentage tax that Congress levies on a product.

“World War I ended a long time ago,” the video says. “Now’s the time to end the FET.”

ATD is leading a new coalition, Modernize the Truck Fleet (MTF), which has two goals: repealing the FET, and identifying an acceptable replacement to sustain the Highway Trust Fund.


Modernize the Truck Fleet (MTF) Coalition

MTF CoalitionA major barrier to modernizing the truck fleet is the current federal excise tax (FET) on heavy-duty trucks. This tax on most new heavy-duty trucks has grown from 3 to 12 percent today and routinely adds $12,000 to $22,000 on the price of a new truck. The FET also can depress new heavy-duty truck sales and delay the deployment of cleaner, safer and more fuel-efficient trucks.  Modernize the Truck Fleet (MTF) is an industry coalition to build support for FET repeal and to identify viable funding options to replace this burdensome tax.

Learn more: 

Issue Brief: Modernize the Truck Fleet; Depoly Clean Trucks Today
Issue Brief: Modernize the Truck Fleet, Deploy Newer Safer Trucks on the Highways Today
➢ Industry Stakeholders Send Letter to Congressional Leadership to Repeal the FET
Press Release: Momentum Builds as More Organizations Unite Behind Federal Excise Tax (FET) Repeal
Press Release: ‘Modernize the Truck Fleet’ Coalition Launches
➢ Press Release: ‘Modernize the Truck Fleet’ Coalition Applauds New Bipartisan Legislation to Repeal the Federal Excise Tax on Heavy-Duty Trucks and Trailers
Press Release: Modernize the Truck Fleet Coalition Rallies Support for H.R. 2381/S. 1839 to Repeal the FET
Join the ‘Modernize the Truck Fleet’ Coalition
➢  'Modernize the Truck Fleet’ Coalition Members

Support Like-Kind Exchange (LKE) Transition Rules for Personal Property

The recently enacted tax reform bill (H.R. 1) repealed the use of like-kind exchanges (LKE) for personal property. Truck dealers and their customers used LKEs to facilitate fleet turnover and purchase new trucks by deferring the recognition of gain on the exchange of existing business assets (i.e. older leased trucks) when replacing them with new products (i.e. new leased trucks). This change in the law has left some truck dealerships that have significant LKE deferments with an additional tax liability that will create a large one-time tax bill that could severely curtail cash flow.  Congress should pass transition rules for LKE deferments that allow businesses additional time to pay this new tax liability so they can continue to create jobs and invest in their businesses.

Learn More

 


Greenhouse Gas Emissions (Phase 2):

Greenhouse Gas (GHG) Emissions and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles

Highway Trust Fund

Read ATD's testimony regarding the Highway Trust Fund: U.S. House Testimony | U.S. Senate Testimony