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Momentum Grows to Repeal Federal Excise Tax on Heavy-Duty Trucks



Charles Cyrill

WASHINGTON – This week the nation’s commercial-truck dealers will convene on Capitol Hill to rally congressional support for S. 3052 and H.R. 2946, bills that would repeal the 12-percent federal excise tax (FET) on the sale of most heavy-duty trucks and trailers.

Nearly 40 heavy-duty truck dealers and trade association executives representing 17 states are attending the American Truck Dealers’ (ATD) legislative fly-in from June 20 to 21. Nearly 100 congressional meetings are scheduled in support of ATD’s legislative agenda. The FET was originally imposed in 1917 to help pay for World War I. It has grown from 3 to 12 percent and routinely adds $12,000 to $22,000 to the price of a new heavy-duty truck.

“It’s the highest excise tax Congress levies on a percentage basis on any product, including alcohol and tobacco,” said Jodie Teuton, ATD chairwoman and vice president of Kenworth of Louisiana and Hino of Baton Rouge. “It’s time for Congress to repeal this tax.” ATD, a division of the National Automobile Dealers Association, represents more than 1,800 heavy- and medium-duty truck dealerships.

On June 12, 2018, Sen. Cory Gardner (R-Colo.) introduced S. 3052, a bill similar to H.R. 2946, the “Heavy Truck, Tractor and Trailer Retail Federal Excise Tax Repeal Act.” “This burdensome tax creates excessive costs that are passed on to truckers, who play an essential role in maintaining our nation’s economy,” said Sen. Gardner. H.R. 2946 was introduced by Rep. Doug LaMalfa (R-Calif.) on June 20, 2017. The bill, which currently has 17 bipartisan cosponsors, includes language stressing the need for Congress to consider a more reliable and consistent revenue mechanism to fund the Highway Trust Fund in place of the FET.

“The financial and regulatory burdens created by the FET hurts truck retailers, drivers and businesses across the country. By repealing this antiquated tax, my legislation seeks to promote the use of more modern trucks on our roads,” Rep. LaMalfa said. “And by incorporating this repeal effort into any future infrastructure funding measure, Congress can rebuild our nation’s crumbling road system while ensuring our commercial truck fleet is both cleaner and safer.”

On May 21, 2018, Rep. LaMalfa sent a letter to House leaders urging them to consider including the FET repeal in an upcoming infrastructure plan.

Jake Jacoby, president and CEO of the Truck Renting and Leasing Association (TRALA), which represents about 500 members who purchase between 25 to 30 percent of all heavy-duty trucks and tractors in North America every year, said the 12-percent FET results in millions of dollars of disincentives to purchase the newest, cleanest and most technologically advanced equipment.

“TRALA is confident that if Congress were to eliminate the FET on trucks and heavy equipment, the economy would be positively impacted,” Jacoby added. “There simply are more efficient ways to help fund the Highway Trust Fund and grow our economy.”

In addition to ATD, other supporters of the FET repeal include Baker Commodities, Bendix Commercial Vehicles, Daimler Trucks North America, Mack Trucks, National Trailer Dealers Association, Navistar, NTEA - The Association for the Work Truck Industry, Recreation Vehicle Dealers Association, Truck & Engine Manufacturers Association, TRALA, Truck Trailer Manufacturers Association and Volvo Trucks North America.

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