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New Bill Could Repeal Excise Tax on Heavy Duty Trucks

New Bill Could Repeal Excise Tax on Heavy Duty Trucks

Costs can add up quickly in the trucking industry, with some being easier to reduce than others. For companies that manage things like fuel, repair costs, and maintenance, these are much easier to factor in than tax. While fluctuating costs may not always be the same, they at least can be lowered through the carriers own planning.

Taxes are fees which are levied for a variety of reasons, but some longstanding excise taxes may be repealed in the trucking industry very soon. A Republican congressman from the state of California recently got the attention of the trucking industry when he introduced a bill that could repeal a federal excise tax on heavy trucks.

The excise tax, which is twelve percent, was originally enacted on commercial trucks to help the government cover the cost of fighting World War I. A century later, the Heavy Truck, Tractor, and Trailer Retail Federal Excise Tax Repeal Act of 2017 is heading to the House Ways and Means Committee. The group will review H.R. 2946, which was introduced by Rep. Doug LaMalfa, and many hope the long-running tax will be eliminated.

Coupled with state and county taxes, which often have a bigger impact on infrastructure, the existing federal excise tax pushes some drivers’ costs above 20%. While trucking groups have been vocal about drivers covering fees used for the things trucks actually affect, the larger the tax burden in the industry means the harder it is for smaller carriers and independent drivers to operate.

The chairman of the American Truck Dealers said the tax is the highest of any federal excise tax levied by Congress, and even manufacturers have come out in support of the repeal. The policy may remain, however, since it is a very beneficial one for raising federal revenues. A study conducted in 2015 showed a total of about $4.5 billion from the excise tax. Recent numbers are closer to $5 billion, showing off that the fee does pay off in the long run for the federal government.

The truck dealers group supports the repeal, however, claiming the boost to small carriers and domestic manufacturing will show economic benefits over time.

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