US Senators Introduce Bill to Repeal Excise Tax on New Trucks
[Stay on top of transportation news: Get TTNews in your inbox.]
Two U.S. senators proposed repealing the excise tax on new trucks as an effort to modernize the freight industry.
Sens. Ben Cardin (D-Md.) and Todd Young (R-Ind.), policymakers on the highways and freight committees, respectively, recently introduced legislation that would undo a 12% tax on new truck and trailer purchases.
Specifically, the bipartisan Modern, Clean and Safe Trucks Act of 2021 would repeal the federal excise tax, which is considered among the highest percentage excise tax levied on any product. The tax has been in place for more than a century.
Modern, Clean and Safe Trucks Act of 2021 by Transport Topics on Scribd
Critics of the tax argue it could discourage private investment in burgeoning new technologies that aim to modernize the domestic truck fleet with cleaner power sources. “The federal excise tax disproportionately impacts electric and alternative-fueled trucks — which currently have a higher upfront cost — at a time when adoption of these technologies is needed to accelerate the transition to zero-emission vehicles and the reduction of carbon pollution from transportation,” according to the legislation.
Cardin
“Our tax policy is one of the most effective ways Congress can encourage cleaner and greener technology. The current federal excise tax has become a barrier to the progress,” said Cardin in a joint statement on July 22. “I am proud to support Maryland manufacturers in their efforts to innovate and deploy cleaner and safer technologies in our trucking industry. Our legislation will spur growth and competitiveness while making our roads safer and less polluted.”
“It’s time to repeal this outdated and onerous tax on our Hoosier truckers,” added Young. “Our bipartisan bill will open the floodgates to investment in safer and cleaner trucks and trailers that will benefit our economy and the environment.”
In recent years, House transportation lawmakers have sought to repeal the tax.
Young
Key stakeholders also have expressed support for repealing the tax, citing industry analysts who have determined the World War I-era excise tax is capable of adding about $21,000 to the cost of a new truck or trailer. The groups include American Trucking Associations, and the American Truck Dealers, a division of the National Automobile Dealers Association.
“The federal excise tax on heavy trucks is a relic from the First World War that’s now serving to keep cleaner, safer trucks off of our nation’s roads today,” said Chris Spear, ATA president. “By repealing this antiquated tax, Congress can deliver a win for the environment, highway safety, manufacturing jobs and supply-chain efficiency. We thank Sens. Young and Cardin for their bipartisan leadership in advancing a common-sense solution to the benefit of American truckers and the motoring public.”
Spear
“On behalf of the trucking industry, we thank Sen. Young and Sen. Cardin for their bipartisan legislation to repeal the [federal excise tax], which will result in cleaner, safer trucks on the road,” said Steve Bassett, ATD chairman. “With most heavy-duty trucks over 10 years old, passing this bill is crucial to help America modernize its aging truck fleet.”
“Cummins supports Sens. Young and Cardin’s effort to repeal the outdated and burdensome federal excise tax on heavy duty trucks. This tax penalizes those who want to adopt the cleanest, most advanced technologies to reduce emissions and improve safety, and repealing it will help ensure the most efficient technologies are being deployed. We applaud Sens. Young and Cardin’s leadership on this issue important to the environment, our customers and our communities,” said Jennifer Rumsey, president and chief operating officer of engine maker Cummins Inc., in a statement that accompanied the senators’ announcement.
Want more news? Listen to today's daily briefing below or go here for more info:
