FET on heavy-duty vans discourages gross sales, ATDTD says

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Industry-led attempts to lift the 12 percent federal excise tax on heavy trucks, which also covers trailers over 26,000 pounds, went – once again – to Capitol Hill.

American Truck Dealers, spearheading the latest effort, said lobbying presentations were held in front of lawmakers practically starting June 22nd, who must operate under ongoing COVID-19 restrictions.

The push to abolish the tax comes as the Biden government is proposing multiple ways to combat climate change, and alongside the wave of new heavy trucks equipped to reduce harmful CO2 emissions.

“Our whole goal is to encourage Congress to remove the 12% FET for heavy trucks because we think it is no longer as relevant as it used to be. It's an old, outdated tax, ”said ATD chairman Steve Bassett.

PERSPECTIVE: Crucial opportunity to repeal FET

ATD is a division of the National Automobile Dealers Association that represents more than 1,700 medium and heavy truck dealerships.

Other industry experts agreed with ATD's position.

"Lifting the FET is the best option, but last year's efforts (in Congress) called for a temporary suspension and there may still be tradeoffs that are still needed to achieve something – all achieved," said Allen Schaeffer. Managing Director of the Diesel Technology Forum, an advocacy group.


"Reform (of the tax) might be less offensive to some who might directly oppose tax cuts in this area, and more open to others who might advocate reducing or discontinuing them or making other adjustments," he said.

The tax was levied for World War I in 1917 and was 3% at the time. ATD's written history of the tax states that it was "abolished briefly, increased twice before World War II, increased again, and incorporated into the Highway Trust Fund in 1956, repealed by the Senate in 1975 and increased to 12% in 1982".

Mike Roeth, executive director of the North American Council for Freight Efficiency, called the repeal "a logical step".

On June 22nd, Senator Todd Young, R-Ind., Was the keynote speaker during the Legislative Virtual Briefing, and ATD referred to him as "a Senate FET Repeal Master."

The auto sector, including auto dealers, has long played a critical role in Indiana's economy. It was a pleasure for me to speak to @NADAUpdate's Hoosier members about the state of the industry and the need to abolish the archaic federal excise tax on heavy goods vehicles.

– Senator Todd Young (@SenToddYoung) June 22, 2021

On the House side, Rep. Chris Pappas (D-N.H.) Will stay on board, Bassett said. Pappas raised support for a temporary suspension of the FET during the pandemic last year.

“The FET is tied to truck sales. You can have really good years or very weak years, ”said Bassett. "And the (motorway) financing has to be more consistent year after year by being based on users and not on cyclical truck purchases."

The FET generated the following amounts for the Highway Trust Fund, ATD reported, citing statistics from the Federal Highway Administration:

  • 2019: $ 5.33 billion
  • 2018: $ 4.33 billion
  • 2017: $ 3.11 billion

Incentives are needed to "get cleaner, greener and safer trucks on the road," said Bassett, noting that 50% of the trucks on the roads are over 10 years old.

“You're talking about a tax that averages between $ 12,000 and $ 22,000 per truck (with an internal combustion engine). This is a big stumbling block for a customer to buy a new truck, ”he said.

Street signs

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Heavy electric trucks are also covered by the FET and likely cost more, said Bassett, who also owns General Truck Sales in Muncie, Ind.

A survey by the American Trucking Associations found that nearly 60% of fleets indicated that they would either buy something without the tax or very likely buy additional trucks and / or trailers beyond their intended purchase period, Transport Topics reported last year.

Mark Parker, director of sales and marketing at Baltimore Potomac Truck Centers Inc. – and NextGen chairman of ATD – told TT that a customer said to him, “I don't want to pay FET, so I'll just buy an older, used truck. "



Truck dealers are responsible for collecting and paying the tax, and determining what amount due can be complicated, according to the NTEA, which represents the work truck industry and provides its members with a 165-page guide on how to comply with the FET.

The coalition, which, in addition to ATD and NTEA, wants to repeal the FET for heavy trucks and trailers, includes: the ATA subsidiary National Tank Truck Carriers, the National Trailer Dealers Association, the Truck Renting & Leasing Association, and the Truck and Engine Manufacturers Association.

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