NTDA praises new bill to repeal FET - 53' Reefer Trailer Rental Experts

NTDA praises new bill to repeal FET 1
NTDA praises new bill to repeal FET 2
NTDA praises new bill to repeal FET 3

Associations representing the heavy-duty transportation equipment industry are once again encouraging members to support legislation to repeal the federal excise tax (FET) on trucks, truck bodies and trailers.

The latest bill, H.R. 2381 or the “Modern, Clean and Safe Trucks Act of 2019,” was introduced this week in the House by Rep. Doug LaMalfa (R-CA), with original co-sponsors Reps. Collin Peterson (D-MN), Tom O’Halleran (D-AZ), Greg Pence (R-IN) and Henry Cuellar (D-TX).

The FET was originally created to help pay for World War I. The 12% excise tax often adds between $12,000 – $22,000 to the cost of a new truck purchase.

“When the FET was introduced over 100 years ago, it was to help pay the costs of fighting World War I. Today, it has quadrupled from 3% to 12% and the Ottoman Empire is no longer around,” said LaMalfa. “It’s an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner and safer vehicles. It’s also the highest percentage-based tax that Congress imposes on any product, and it’s not even a reliable source of funding for the Highway Trust Fund.

“Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them. They’re far more likely to purchase used or older trucks with older technology that are not as fuel efficient or don’t achieve the air quality goals the government demands. The FET limits truck replacement, the associated economic growth, and needs to be repealed.”

The Modernize the Truck Fleet (MTF) coalition, committed to repealing the outdated and burdensome FET and identifying an acceptable replacement to sustain the Highway Trust Fund, praised this latest effort in Congress.

“The Federal Excise Tax has long been an unfair method of taxing the truck and trailer industry. The National Trailer Dealers Association supports legislation that encourages the sale of newer trailers and that more fairly supports the construction and maintenance of our highways and roads,” said NTDA President Gwen Brown. “We support H.R. 2381 and applaud the co-sponsors of this bipartisan legislation.”

Along with NTDA, the coalition includes the American Truck Dealers, National Tank Truck Carriers, NTEA – the Association for the Work Truck Industry, Truck Renting and Leasing Association, and the Truck and Engine Manufacturers Association.

“The FET discourages truck buyers from purchasing the newest, safest and cleanest trucks and trailers available,” said Jodie Teuton, chairwoman of the ATD and MTF steering committee member. “This tax is as outdated as biplanes and trench warfare. MTF applauds the bipartisan leadership Reps. Peterson and LaMalfa have shown by introducing this bill. MTF urges members of Congress to cosponsor H.R. 2381 to repeal the FET, which will help turnover the truck fleet and put newer, more fuel efficient and safer trucks on the road.”

H.R. 2381 has been referred to the House Ways and Means Committee for further consideration. MTF is “strongly” urging Congress to include H.R. 2381 in an infrastructure modernization bill, as they advance broader legislation.

NTDA likewise encourages members to contact their representatives in Congress. For legislative and regulatory resources, visit ntda.org/advocacy/fet-repeal. Also visit ntda.org/advocacy.