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U.S. Senate to Consider Bill Opposing Increases in FET

H.R. 2946: Heavy Truck, Tractor, and Trailer Retail Federal Excise Tax Repeal Act of 2017

A new bill has been introduced to U.S. Congress that will seek to repeal the federal excise tax (FET), which is at present 12 percent. The FET on heavy duty trucks dates back to 1917 when it was introduced to defray the cost of World War I. The tax on new heavy duty trucks later grew from 3 percent in 1917 up to the 12 percent we see today.

The 12 percent FET on the purchase of heavy duty trucks is a burdensome tax – higher than taxes for all other vehicles, and when combined with recent federal emissions and fuel-economy mandates, can add up to thousands of extra dollars when purchasing a new truck. At its present 12 percent, the FET depresses heavy duty truck sales and, as a result, slows companies from replacing their old fleets with new cleaner and more fuel-efficient trucks.

Truck purchase prices have been hiked which directly impacts the cost of food, consumer goods, as well as other products. “This is taxation on American jobs”, said the bipartisan group of U.S. House members led by Sen. Cory Gardner. The truck FET affects more than 1,800 commercial truck dealers in America and the National Automobile Dealers Association and American Truck Dealers which has over 7.3 million Americans employed in the U.S. trucking industry. The difficulty and complexity of administering FET forces truck dealers to spend their time and effort navigating complicated IRS regulations associated with collecting the tax.

The move has the full backing of American Truck Dealers, commercial trucking, towing, and auto transport companies and should be considered by the House Ways and Means Committee when they draft legislation to reform the overall tax code.

Given the current financial condition of the Highway Trust Fund, and the possibility of an infrastructure bill, increasing the FET remains a prospect. Lately, reports published by different government and NGO gatherings have proposed expanding this tax by an extra 1 to 10 percent. However, Congress should oppose any further increase in the FET and consider lowering it if not eliminating FET to deal with detrimental impacts on safety, the environment, and the trucking industry. Congress should include H.R. 2946 in its upcoming tax reform bill. Lowering or – hopefully – eliminating the FET will help the industry grow.

East Coast Truck and Trailer Sales has a huge selection of trucks and trailers on the lot – we have what you’re looking for. Check out our car haulers, wreckers, and rollbacks in inventory today and give us a call at 1-800-849-2178. Our in house finance department works with over 30 different lender types to get you on the road faster. Let us get you in the truck you need today!

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