OOIDA is supportive of a resolution in Congress that opposes any increase to the federal excise tax on new trucks and trailers. The Association supports the passage of the measure filed by U.S. Reps. Reid Ribble, R-Wis., Tim Walz, D-Minn., and 16 co-sponsors, ahead of any attempts that would increase the 12-percent tax on new trucking equipment in the next highway bill.
According to language in House Concurrent Resolution 33, the average retail price of a new truck is $169,000, and that continues to increase based on mounting regulatory requirements for fuel economy and emissions. The 12 percent federal excise tax, or FET, adds another $20,280, on average, to the purchaser’s cost.
Some government agencies and various nonprofit groups have suggested increasing the tax to as high as 20 percent.
“The existing 12 percent levy on heavy duty trucks is already the highest excise tax imposed by Congress on a percentage basis,” Eric Jorgensen, Peterbilt dealer and chairman of the American Truck Dealers, stated in a news release.
“With a highway bill and comprehensive tax reform on the agenda in Washington, H. Con. Res. 33 sends a clear message to Congress that hiking the FET on commercial trucks should not be on the table. Since all the heavy-duty trucks sold in the U.S. in 2014 were manufactured in North America, increasing the FET would hurt the nearly 9 million Americans employed in the U.S. trucking industry.”
Small-business truckers and owner-operators typically pay more than the industry average for their trucks, and therefore more in taxes, due to spec’ing, customizing and other functions to accommodate their work and lifestyles out on the road.
OOIDA Executive Vice President Todd Spencer says that’s a big reason to support the resolution.
“The FET on new trucks has never been a true user fee,” Spencer told Land Line Magazine. “It always has discriminated against small-business truck owners who frequently pay the highest prices for new trucks plus the FET.”
OOIDA is concerned about the compounding costs associated with federal mandates and proposals such as the greenhouse gas and fuel economy standards from the Environmental Protection Agency and National Highway Traffic Safety Administration.
From 2002 up through the current proposals for fuel economy and emissions, environmental regulations will have added more than $30,000 to the sticker price of a new truck, according to American Truck Dealers.
“The FET is a significant additional cost to new trucks that have only gotten more expensive due to various government mandates, putting a new truck out of reach for more hard-working small-business owners every year,” said Ryan Bowley, the Association’s director of legislative affairs in Washington, D.C.
“OOIDA supports efforts to address the significant challenges facing the Highway Trust Fund; however, any approach should be balanced across all highway users.”
According to the American Truck Dealers, the federal excise tax on new trucks was established in 1917 to help defray the cost of World War I. The initial rate was 3 percent but was raised to 12 percent when Congress incorporated the FET into the Highway Trust Fund to pay for transportation.
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