Legislation Opposes Hiking the Federal Excise Tax on New Trucks

Truck dealers applaud Reps. Ribble and Walz for efforts

WASHINGTON (March 27, 2015) - Reps. Reid Ribble (R-Wis.) and Tim Walz (D-Minn.) reintroduced  legislation this week that reaffirms congressional opposition to any increase of the excise tax on new heavy-duty trucks. The concurrent resolution, H. Con. Res. 33, was introduced with 17 original bipartisan cosponsors.  

"The existing 12 percent levy on heavy duty trucks is already the highest excise tax imposed by Congress on a percentage basis," said Eric Jorgensen, chairman of the American Truck Dealers (ATD) and a Wisconsin Peterbilt truck dealer. "With a highway bill and comprehensive tax reform on the agenda in Washington, H. Con. Res. 33 sends a clear message to Congress that hiking the FET on commercial trucks should not be on the table. Since all the heavy-duty trucks sold in the U.S. in 2014 were manufactured in North America, increasing the FET would hurt the nearly 9 million Americans employed in the U.S. trucking industry. ATD applauds the leadership of Representatives Ribble and Walz to fight against increasing this tax. This is ATD's number one priority."

An increase in the FET would depress new heavy-duty truck sales, and would also delay the deployment of cleaner, safer, and more fuel efficient trucks. ATD strongly supports this legislation, and is urging all its members to contact their congressional representatives and request their cosponsorship on H. Con. Res. 33. Additionally, ATD has been reaching out to other stakeholders to garner support for this legislation and will continue to do so throughout the year. Click here to read more about the concurrent resolution.
 
"I have long believed that the federal excise tax deters business owners from purchasing safe, more fuel-efficient and environmentally sound trucks that are critical to moving goods on the road," said Rep. Ribble. "The federal excise tax damages truck manufacturing and its related jobs by raising the costs of new safer trucks. The tax is a minimal part of the Highway Trust Fund and should not be increased. I am working on broader legislation to solve the Trust Fund's systemic problem without stifling economic activity."

Originally imposed to help defray the cost of World War I, the FET on heavy-duty trucks has long outlived its purpose. What's more, since 1955, the excise tax rate on most new heavy-duty trucks, tractors and trailers has increased by 300 percent, ballooning from 3 percent when it was initially incorporated into the Highway Trust Fund to its current rate of 12 percent.

"We need a robust transportation bill that makes bold investments to repair our crumbling infrastructure system, increase safety, and encourage more fuel efficient vehicles on our roads," Rep. Walz said. "Part of that plan should include encouraging trucking companies to move towards safer, more fuel-efficient trucks and that starts with not raising the Federal Excise Tax. The purchase of trucks is already highly taxed at a rate of 12 percent, adding, on average, nearly $20,000 in additional costs. An additional increase is not the way to go, which is why I, along with Rep. Ribble, introduced this resolution today encouraging negotiators not to increase it in a robust transportation package."

Ribble and Walz were joined by a number of their colleagues in introducing this legislation, including: Reps. Rob Bishop (R-Utah), Rod Blum (R-Iowa), Steve Cohen (D-Tenn.), Kevin Cramer (R-N.D.), John Duncan (R-Tenn.), Elizabeth Esty (D-Conn.), Blake Farenthold (R-Texas), Richard Hanna (R-N.Y.), John Katko (R-N.Y.), Dan Lipinski (D-Ill.), David McKinley (R-W.Va.), Mark Meadows (R-N.C.), Grace Napolitano (D-Calif.), Kurt Schrader (D-Ore.) and Mark Walker (R-N.C.).

ATD is taking the lead on generating support for H. Con. Res. 33 and the following organizations have agreed to support H. Con. Res. 33: American Highway Users Alliance; Daimler Trucks North America; Mack Trucks, Inc.; Meritor WABCO; NAFA Fleet Management Association; National Trailer Dealers Association; Navistar, NTEA - The Association for the Work Truck Industry; Owner Operator Independent Drivers Association; Recreation Vehicle Industry Association; Truck & Engine Manufacturers Association ; Truck Renting and Leasing Association; Truck Trailer Manufacturers Association; and Volvo Trucks North America.