NATD
Fet 2021 Web

FET repeal bill back in action

July 24, 2021
Repeal of the 12% FET allows fleets to replace older heavy-duty trucks with 'newer, safer and greener' trucks and trailers

Modernize the Truck Fleet, a coalition of trucking industry stakeholders, have announced their “strong support” for recently introduced bipartisan legislation to repeal the 12% federal excise tax (FET) on the sale of heavy-duty trucks and trailers.

The bill, S. 2435, comes from by Sen. Todd Young (R-Ind.) and Sen. Ben Cardin (D-Md.), both members of the tax-writing Senate Finance Committee, which has jurisdiction over transportation-related taxes.

The proposed legislation is intended to modernize America’s heavy-duty truck fleet and protect the 1.3 million jobs supported by the U.S. trucking industry, according to the coalition. Repeal of the FET allows fleets to replace older heavy-duty trucks with “newer, safer and greener” trucks and trailers. The coalition is urging Congress to include the Young/Cardin legislation in the bipartisan infrastructure legislation.

"With most heavy-duty trucks over ten years old, passing this bill is crucial to help America modernize its aging truck fleet,” said Steve Bassett, ATD chairman and dealer principal of General Truck Sales in Muncie, Ind.

The FET was first enacted by Congress in 1917 to help fund World War I and is the highest excise tax on a percentage basis that Congress levies on a product, often adding over $20,000 to the price of a new heavy-duty truck, MTF notes. The tax coupled with recent regulatory costs makes it more difficult for small businesses to afford a new truck.

The Truck Trailer Manufacturers Association, National Trailer Dealers Association, and National Association of Trailer Manufacturers are among the industry backers.

“Any suspension of the FET or an ultimate repeal of the tax would greatly benefit the heavy-duty truck and semi-trailer industry that provides the vehicles to deliver essential goods to our nation through the best and worst of times,” NTDA President Gwen Brown told Trailer/Body BUILDERS last year as COVID-19 shutdown the economy.

And TTMA President Jeff Sims called the FET suspensions “a great way to incentivize carriers to add to their fleet a more efficient trailer.”

Mark Parker, ATD NextGen chairman from Linthicum Heights, Md. added: “Doing away with the FET will help small businesses replace older trucks with new trucks that have the latest safety features, which will reduce crashes and increase highway safety.”

The full text of the bill, S. 2435, to repeal the FET can be found here

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