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Rep. Doug LaMalfa Tim Hearden
Rep. Doug LaMalfa talks to his aide, Brenda Haynes, before a meeting. He is teaming with Rep. Collin Peterson on a bill to repeal the federal excise tax on large truck purchases.

Bill would repeal excise tax on big trucks

House Ag Committee chair Peterson teams with California's Rep. LaMalfa to jettison 102-year-old levy.

A bill in Congress seeks to repeal a 102-year-old federal excise tax on large truck sales that was enacted to help pay for World War I but whose burden has quadrupled since.

House of Representatives Agriculture Committee chairman Collin Peterson, D-Minn., is teaming with California Republican Doug LaMalfa to try to jettison the levy, which was 3 percent at the time it was imposed but has grown to 12 percent now.

The revenue generated by the tax now goes into a highway fund, but the lawmakers argue it's become unreliable because truck sales are inconsistent year to year.

"The federal excise tax is an outdated burden to small businesses looking to invest in our transportation industry," Peterson says. "Repealing this tax would encourage new, and cleaner fuel-efficient vehicles on our roads.”

As it is now, the tax discourages large truck users from buying the safest and cleanest trucks and trailers available, contends Jodie Teuton, Chairwoman of the American Truck Dealers (ATD) and Steering Committee member of Modernize the Truck Fleet. 

“This tax is as outdated as biplanes and trench warfare," she says, adding she hopes more members of Congress will sign on as cosponsors to "put newer, more fuel-efficient and safer trucks on the road.”

Older trucks still on road

According to the bill's proponents:

  • The average age of a heavy-duty truck on the road is 9.6 years old.
  • Since 2000, technologies to meet new emissions standards have reduced nitrogen oxide emissions of recently purchased heavy-duty trucks by 97 percent, but these regulations and fuel efficiency standards add nearly $40,000 to the price of a new truck.
  • Recent model year trucks have the latest safety features built in, including electronic stability control, which helps prevent rollovers, anti-lock brakes and enhanced braking, driver air bags, LED headlights, and marker lighting to help improve nighttime visibility.
  • On average, the federal excise tax adds between $12,000 and $22,000 to the final sale price of a new truck and delays fleet turnover of newer, cleaner, higher fuel-efficiency trucks.

"Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them," says LaMalfa, a Richvale, Calif., rice farmer and House Agriculture Committee member.

"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," he says. The tax "limits truck replacement, the associated economic growth, and needs to be repealed.”

A similar bill was proposed in the Senate last summer. This legislation, House Resolution 2381, was introduced April 29.

TAGS: Trucks
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