Trucking Industry Makes Another Run at Killing Federal Excise Tax

July 30, 2019 by Jerry Hirsch, @Jerryhirsch

A broad coalition is making another attempt to repeal a century-old excise tax on heavy-duty trucks after failing twice in recent years to move the legislation through Congress.

The tax raises about $3 billion annually for the Highway Trust Fund, depending on truck sales and the economy.

This time, a group that includes road builders and trucking, logistics and manufacturing companies is supporting H.R. 2381. It has 23 bipartisan co-sponsors, and the coalition is working hard to gather votes from both sides of the aisle.

“For the first time, broad segments of America’s trucking industry are uniting to repeal the FET to modernize the truck fleet and promote new, cleaner and safer heavy-duty trucks and trailers,” said Jodie Teuton, chairwoman of American Truck Dealers, a division of the National Automobile Dealers Association.


The group calls itself the Modernize the Truck Fleet coalition. It recently sent a letter urging repeal to Senate Majority Leader Mitch McConnell, R-Ky.; Minority Leader Charles Schumer, D-N.Y.; House Speaker Nancy Pelosi, D-Calif.; and Minority Leader Kevin McCarthy, R-Calif.

Reps. Doug LaMalfa, R-Calif., and Collin Peterson, D-Minn, introduced the legislation. The same legislation is working its way through the Senate.

“This legislation is a good step forward,” the coalition said. It urged Congress to adopt funding alternatives that are user-based and provide more consistent revenue to fund the Highway Trust Fund. It said such a change might be part of a wider highway infrastructure bill.

Lawmakers introduced similar legislation to repeal the tax in 2012 and 2017. Both efforts failed.


The industry calls the 12 percent tax the FET. It adds $12,000 to $22,000 to the cost of a heavy-duty truck, depending on the vehicle. It is the highest of any federal excise tax levied by Congress, according to American Truck Dealers. The group represents more than 1,800 commercial truck dealers in the U.S. Lawmakers enacted the tax to help pay the cost of fighting World War I more than a century ago.

The truck tax has grown from 3 percent, when it was incorporated into the Highway Trust Fund in 1955, to 12 percent today. The government charges the tax on new sales of trucks with a gross vehicle weight rating, or GVWR, of more than 33,000 pounds.

The coalition is arguing that ending the FET would encourage fleets to replace older trucks with those that are  more fuel-efficient and safer.


Although medium and heavy-duty trucks account for just 4 percent of vehicles on the road, they consume more than 22 billion gallons of diesel fuel and travel over 200 billion miles per year, the coalition said in its letter to lawmakers.

“This activity means small improvements to the truck fleet can yield large results,” the letter said. A typical truck in the heaviest Class 8 weight segment gets about 6.5 mpg. But new trucks are about 10 percent more efficient.

“Since 2010, new, more efficient diesel trucks have saved 101 million barrels of crude oil,” the coalition said.

Those trucks also are cleaner.

Over the past three decades, cleaner fuel and advanced engines have combined to reduce emissions of oxides of nitrogen by 97 percent and particulate matter emissions by 98 percent, the coalition said.

“Since 2010, new, more efficient diesel trucks have saved 101 million barrels of crude oil,” it said.

The average age of trucks on the road is about 10 years.

New trucks are often equipped with airbags and a suite of driver-assistance technologies. These include automatic emergency braking, adaptive cruise control with braking, lane-departure warning and lane-keeping assist blind-warning.

Jerry Hirsch July 11, 2019
Orders for new heavy-duty trucks plunged 66 percent during the first half of this year compared to last year. It is the weakest 6-month start to a year since 2010.

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