Trucking leaders ask Congress to suspend federal excise tax on equipment
Dozens of business organizations and policymakers sent a joint letter to Congress yesterday asking for a suspension of the 12 percent federal excise tax (FET) on the purchase of new heavy-duty trucks and trailers until the end of 2021
The letter argues the suspension of the FET would spur sales of newer cleaner trucks, which would retain jobs in the trucking sector and help rebuild our economy.
The letter cited dire predictions of truck and equipment sales declines in 2020 by 50 percent due to the pandemic. In March, alone, Class 8 truck orders dropped by 52 percent compared to last year. Additionally, as a result of government-ordered closures, truck manufacturing plants and truck dealers have either suspended or scaled back operations.
“To jumpstart the economy after the pandemic, a suspension of the burdensome FET, which increases the cost of new heavy-duty trucks and trailers by $22,000 on average, would immediately spark the purchase of heavy-duty trucks and trailers,” the letter states. “In turn, this would help save or bring back the livelihoods of the 7.8 million Americans employed in jobs related to trucking.”
The letter also stated that in addition to saving jobs, a suspension of the FET would spur sales of today’s cleaner and safer heavy-duty trucks and trailers by making them more affordable during this difficult economic time.
“Over the past two decades, the trucking industry has made strong environmental gains, and today’s heavy-duty trucks are cleaner than ever before,” it states. “Cleaner fuel and engines utilizing advanced technologies have combined to reduce nitrogen oxide emissions by 97 percent and particulate matter emissions by 98 percent. Since 2010, more fuel-efficient diesel trucks have saved101 million barrels of crude oil and reduced CO2 emissions by 43 million tons.”
‘Not Looking for a Bailout’
The American Trucking Associations is a member of the coalition that issued the letter, and its President Chris Spear told Transport Topics on April 28 that trucking businesses have been greatly affected by the economic shutdown.
“Truckers aren’t looking for a bailout as they keep America moving during these challenging times and prepare for our eventual recovery,” he said, “but a tax holiday on the antiquated federal excise tax would be good medicine to help with liquidity and to stimulate the purchase of newer, safer trucks and trailers.”
The coalition’s letter offered that another benefit of the suspension of the tax would also encourage the sale of newer trucks, which have the latest safety technologies that help reduce roadway crashes and related injuries and fatalities. During this crisis, the nation has been more dependent than ever on trucks for the delivery of goods and critical medical supplies, yet the average age of a truck on the road today is almost 10 years old, the letter states.
“We believe the suspension of the FET can help both in keeping the nation well supplied and in rebuilding America’s vital trucking industry and related employment,” it reads.