Efforts renewed to repeal heavy truck excise tax
If passed, a new bill introduced in Congress – the Modern, Clean, and Safe Trucks Act – will repeal the 12 percent federal excise tax on the purchase of new heavy trucks.
The tax began in 1917 to finance America’s involvement in Worl War I. Despite previous attempts to repeal or reduce the tax — most recently in 2021 — it’s been extended and increased multiple times since its inception. The tax is currently scheduled to terminate on October 1, 2028 (Title 26 U.S. Code, Chapter 31, Subchapter C).
According to supporters of the bill, the federal retail excise tax adds:
- $7,000 or more to the cost of new trailers,
- $20,000 or more for new clean diesel trucks, and
- As much as $50,000 to the next generation of trucks with advanced engine technologies.
Findings noted in the bill argue that:
- The tax discourages the replacement of older, less environmentally clean and less fuel economical vehicles; and
- Repealing the federal excise tax would result in the replacement of older internal combustion engine trucks with new heavy-duty trucks that employ the latest safety and environmental technologies.
Revenue from the tax is currently dedicated to the Highway Trust Fund.
Who pays the tax?
A tax of 12 percent of the amount for which the article is sold is imposed on the first retail sale of the following articles (including parts or accessories sold on or in connection with their sale):
- Automobile truck chassis,
- Automobile truck bodies,
- Truck trailer and semitrailer chassis,
- Truck trailer and semitrailer bodies, and
- Tractors used for highway transportation in combination with a trailer or semitrailer.
Exclusions apply for:
- Trucks weighing 33,000 pounds or less,
- Trailers weighing 26,000 pounds or less, and
- Tractors weighing 19,500 pounds or less.
Key to remember: On March 27, 2025, Congress introduced a bill to repeal the 12 percent excise tax on heavy trucks and trailers. The bill was referred to the House Committee on Ways and Means.