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Truck Dealers Fly to Washington to Ask: Why is Congress Still Taxing Clean Trucks?

Published June 21, 2022

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U.S. commercial truck dealers and dealer association executives are coming to Capitol Hill to call on Congress to promote the adoption of advanced technology trucks by repealing the 12% federal excise tax (FET) on the sale of heavy-duty trucks and trailers.

The annual fly-in, which will take place June 21-22, is hosted by the American Truck Dealers (ATD) and will include briefings and digital advocacy outreach to support S. 2435, the Modern, Clean and Safe Trucks Act of 2021.

The bipartisan bill, which was introduced by Sen. Todd Young (R-Ind.) and Sen. Ben Cardin (D-Md.) in July 2021, is the first effort in the Senate since 1975 to repeal the FET. A House companion, H.R. 8116, was introduced on June 16 by Rep. LaMalfa (R-Calif.) and Chris Pappas (D-N.H.).

Promote Newer, Greener Trucks by Repealing FET

The FET, which was introduced in 1917 to help pay for World War I, is the highest excise tax on a percentage basis that Congress levies on a product, often adding as much as $22,000 to the price of a new heavy-duty truck.

The Environmental Protection Agency (EPA) is currently working on a mandate to further reduce nitrogen oxide (NOx) emissions from trucks by as much as 60% by 2045. This will require replacing older commercial trucks and trailers with cleaner and more fuel-efficient models quickly.

Meanwhile, these new trucks are being hit with this enormous tax, which is a disincentive to the purchase of the cleaner vehicles the government wants on the roadway. Electric or hydrogen fuel-cell trucks already cost more than twice the amount of traditional internal combustion engine trucks, which means the FET can add more than $50,000 to the price of these new, cleaner trucks.

“Taxing the purchase of a clean truck is counter to everything the current administration is working towards on their climate goals," said Jodie Teuton, ATD Kenworth line representative and vice president of Kenworth of Louisiana and Hino of Baton Rouge and Monroe. "When Congress levies an FET on these new trucks it is a deterrent to investing and deploying these vehicles with clean technology that the government wants on the road. It penalizes the green investment.”

“One of the most effective ways Congress can encourage a cleaner and greener technology adoption in the truck industry is through tax policy,” said ATD chairman Scott McCandless. “It’s time for Congress to repeal the FET and to advance the deployment of newer, greener trucks, that will lead us toward an advanced technology and zero emissions future.”

Learn more about the FET and S. 2435 here.