Senate Bill Introduced to Repeal Federal Excise Tax
Some causes are worth continuously fighting for.
On the 22nd of July, Senator Todd Young (R-IN) introduced bill S.2435 co-sponsored by Senator Ben Cardin (D-MD) to repeal the Federal Excise Tax (FET) on new heavy-duty truck purchases. This is not the first time that the FET has been under scrutiny, but with senators behind it, it is the furthest it has traveled in recent times.
The FET adds a three-to-twelve-percent surcharge on the retail of all new purchases of big rigs. Rates and prices naturally vary, but if we assume a flat 10% on the estimated 283,000 units sold in 2020, then that means the value of approximately 25,728 trucks had been collected from the federal government that year.
Taxes, however, are much easier to implement than they are to take away. The FET was established in 1917 to help fund World War I, and truckers have been paying it ever since. The problem of the FET is exacerbated by the supply shortage of trucks raising prices, which results in a higher tax.
A survey conducted by the American Trucking Associations has stated that 60% of companies surveyed would consider buying an additional new truck if the FET were not a factor in purchasing.
Procrastination regarding buying new trucks due to the FET also has a negative impact on road safety, as newer trucks have many new features that were not standard eleven years ago:
- Lane departure warning
- Blindspot warning
- Automatic headlamps
- Automatic wipers
- Side airbags (for rollover catastrophes)
- Tire pressure monitoring
- Forward collision mitigation
The bill has only just been introduced into the Senate. It still has to go through the rigorous process of being approved by both segments of Congress then getting signed off by the president. It does have the potential for being approved, however; Republicans can support the economic stimulus from tax savings while Democrats can push the emission reductions of upgrading to newer and more efficient vehicles.
A system that might work better than the FET is for the federal government to instead tax trucks that are older than twelve years. Taxes in general are not preferable, but if the federal government is so insistent on reaching into the pockets of the hard-working trucking industry, at the very least it could also be a force for social good rather than actively punishing businesses choosing to expand rather than stagnate.
Top Trending Trucking Articles
- Congress Considers Side Guards for Trailers
- Truck Parking Bill Makes a Comeback
- Joe Biden’s Infrastructure Plan and How it Impacts Truckers
- CVSA Operation Safe Driver Week Starts July 11th
- Companies and Drivers Split on DRIVE-Safe Act
- Trucking Insurance Bill Reintroduced to Congress
- AB-5 Applies to Trucking, Appeals Court Ruled
- FMCSA Declares Regional Emergency Regarding Fuel
- I-40 Bridge Shut Down Until Further Notice
ABOUT TOPMARK FUNDING
TopMark Funding is a top-rated semi-truck financing and trailer financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.
We’re not here for the short-term, we’re on the long-haul with you!
We have financing options for trailers, semi-trucks, commercial trucks, and small businesses. We have great rates, low down payments, and flexible monthly payments regardless of credit history.
Learn more about Trailer Financing.
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.