FET Suspension Bill Introduced in House
We have talked about the potential suspension of the Federal Excise Tax (FET) before, but with the current administration, it may just become reality this time.
The FET was introduced in 1917 to help finance World War I. A decade later and it is still levying a 12% price increase on newer heavy-duty trucks and trailers. There have been numerous attempts to suspend or even remove the FET altogether, but none have succeeded.
Chris Pappas, a Democrat from New Hampshire and Doug LaMalfa, a Republican from California, have come together to draft a bipartisan bill called the Modern, Clean, and Safe Trucks Act of 2022.
Failed attempts to alleviate fleets of the FET have cited things such as supply chain shortages and the coronavirus pandemic as reasons to stimulate the trucking industry. This time, there will be a different approach: the technology in the newer trucks.
“Between Sacramento and Washington, truckers have dozens of regulations on emissions and safety to follow. However, at the same time, our tax code disincentivizes them from purchasing the most up-to-date trucks… we should drop the burdensome tax preventing our truck drivers from having the most modern, highest technology and safest equipment on the road,” LaMalfa said in a release.
While the economy is not at the forefront of the issue anymore, it still plays a role. Pappas said in a statement: “This is a time when we must do all we can to lower costs for small businesses and consumers, and cutting the federal excise tax on heavy trucks and trailers will help America’s Main Street economy grow, address supply chain challenges and shortages, and lower costs for essential items that families need like groceries and gas.”
Assuming it passes the House and Senate, the main obstacle would be convincing Biden to sign it. Provided his advisors inform him that the most Class 8 trucks are over a decade old (as mentioned in the Bill) and that signing it would reduce emissions, we can see him signing it into law. If the federal government is serious about conserving the environment, this is a surefire way to score some points in that regard.
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