Bill to repeal federal excise tax on new trucks, trailers introduced

 There is now a bill in both the House and Senate that would repeal the 12% excise tax on new trucks and trailers.
There is now a bill in both the House and Senate that would repeal the 12% excise tax on new trucks and trailers.

U.S. Sen. Cory Gardner (R-CO) has introduced a bill that would repeal the excise tax on heavy trucks and trailers. The bill, S. 3052, was introduced on June 12 and is similar to a bill in the House that would also repeal the 12% federal excise tax (FET).

The bill would amend the Internal Revenue Code of 1986 and remove the tax, which is among the highest excise taxes for any industry, said Gardner.

“This burdensome tax creates excessive costs that are passed on to truckers, who play an essential role in maintaining our nation’s economy,” said Gardner. “I was happy to introduce legislation to repeal it.”

The FET was originally introduced in 1917 to help pay for World War 1. At that time, it was 3%, but has grown to its current 12% over time, adding tens of thousands of dollars to the cost of a new truck or trailer.

Gardner’s bill does not have any supporting text at this time, but in a statement, the American Truck Dealers (ATD) said the bill is similar to H.R. 2946, the “Heavy Truck, Tractor and Trailer Retail Federal Excise Tax Repeal Act” introduced by U.S. Rep. Doug LaMalfa (R-CA) in June 2017. The House bill currently has 17 bipartisan cosponsors.

“It is the highest excise tax Congress levies on a percentage basis on any product, including alcohol and tobacco,” said ATD Chairwoman Jodie Teuton, vice president of Kenworth of Louisiana and Hino of Baton Rouge. “It’s time for Congress to repeal this tax, and we thank Sen. Gardner for his leadership on this important issue.”

ATD represents more than 1,800 medium- and heavy-duty truck dealerships in the U.S.

Other businesses supporting repeal of the FET 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, Truck Renting and Leasing Association, Truck Trailer Manufacturers Association and Volvo Trucks North America.

The House bill says that the 12% FET significantly increases “the cost of new heavy-duty trucks, tractors, and trailers, and discourages the replacement of older, less environmentally clean and less fuel economical vehicles.”

In 2016, the bill states, the “average manufacturer suggested retail price for heavy trucks was over $175,921 [and] the 12-percent federal retail excise tax routinely adds between $12,000 and $22,000 to the cost of a heavy truck, tractor, or trailer.”

The House bill was referred to the House Ways and Means Committee, but it has seen no action as of yet.

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Brian Straight

Brian Straight covers general transportation news and leads the editorial team as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler.

One Comment

  1. The new trucks dont get better mileage. They have twice as much going in the 2-3 tanks & twice as much coming out the pipes lol. The reason the new trucks are not selling is because of the eld mandate. That guy is exactly whats wrong with the trucking industry. The plan is to monopolize & take over everything just like the railroad.

  2. Jon the new trucks are very fuel efficient and have some of the best safety features from the factory. The repeal of the excise tax would not only help our environment but it would also make our roads safer.