Bill would repeal federal excise tax; OOIDA waits to see offset

June 2019

Mark Schremmer


Rep. Doug LaMalfa, R-Calif., has resumed his efforts to repeal the federal excise tax on heavy-duty trucks and trailers.

On April 29, LaMalfa introduced the Modern, Clean, and Safe Trucks Act, or HR2381, which aims “to amend the Internal Revenue Code of 1986 to repeal the excise tax on heavy trucks and trailers, and for other purposes.”

The bill said that the 12 percent tax on heavy trucks, tractors, and trailers is the highest percentage rate of any federal ad valorem excise tax.

“When the FET was introduced over 100 years ago, it was to help pay the costs of fighting World War I,” LaMalfa wrote in a news release. “Today, it has quadrupled from 3% to 12%, and the Ottoman Empire is no longer around. It’s an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner and safer vehicles.”

LaMalfa also attempted to remove the tax with a previous bill in 2017. Earlier this year, American Truck Dealers launched a coalition called Modernize the Truck Fleet with the goal of eliminating the tax.

After the coalition was launched in January, the Owner-Operator Independent Drivers Association said it was not opposed to the repeal but that the Association wants to know where lawmakers will turn to find the lost revenue if the federal excise tax is eliminated.

“OOIDA isn’t opposed to repealing the FET, but Congress must identify an offset first. Meaning, repealing the FET would create a reduction in tax revenue that would need to be replaced somehow,” said Mike Matousek, OOIDA’s manager of government affairs. “We will remain neutral until an offset is identified and until we know exactly how the offset would impact our members.”

The coalition for the repeal includes ATD, Truck and Engine Manufacturers Association, Navistar, Paccar, Volvo, Cummins, NTEA, and the Truck Renting and Leasing Association.

Co-sponsors of LaMalfa’s bill are Reps. Collin Peterson, D-Minn., Tom O’Halleran, D-Ariz., Greg Pence, R-Ind., and Henry Cuellar, D-Texas. LL

Mark Schremmer

Mark Schremmer, senior editor, joined Land Line in 2015. An award-winning journalist and former assistant news editor at The Topeka Capital-Journal, he brings fresh ideas, solid reporting skills, and more than two decades of journalism experience to our staff.