Bills include tax ramifications for truckers

A pair of bills introduced in Congress would have tax ramifications for truckers.

One bill would repeal the federal excise tax on heavy trucks and trailers, and another would offer temporary tax credits to truck drivers.

Modern, Clean and Safe Trucks Act

In late March, Rep. Doug LaMalfa, R-Calif., introduced HR2424. The bipartisan effort would remove the 12% federal excise tax on heavy trucks. Proponents of the bill, which has been issued several times in recent congressional sessions, have said the tax can add $15,000 to $30,000 to the cost of a new heavy-duty truck.

“For over a century, the federal excise tax on heavy-duty trucks has gone from a temporary wartime measure to fund World War I to an outdated tax that punishes truck buyers,” LaMalfa said in a news release. “This is the highest percentage-based tax Congress imposes on any product, yet it fails to be a reliable source of funding for the Highway Trust Fund. This tax forces buyers to stick with older, less efficient models and makes it harder for truckers to modernize their rigs, holding back the trucking industry from updating. Let’s repeal this outdated tax and support the men and women who keep America moving.”

Reps. Chris Pappas, D-N.H.; Darin LaHood, R-Ill.; Salud Carbajal, D-Calif.; and Max Miller, R-Ohio, signed on as original co-sponsors.

As with previous versions of the bill, the Owner-Operator Independent Drivers Association voiced concern about the bill not including an offset.

Without that information, OOIDA said, it’s unclear how the bill would affect its members.

“While we would support any proposal that might provide financial relief to our members, it’s unlikely that a (federal excise tax) repeal would benefit small-business truckers,” said Bryce Mongeon, OOIDA’s director of legislative affairs. “We know our members typically purchase used trucks and hold on to them for a long time. A (federal excise tax) suspension would also create a significant shortfall in the Highway Trust Fund, and without a proposal to address this deficit, we are concerned a future offset would disproportionately burden small-business truckers.”

Strengthening Supply Chains Through Truck Driver Incentives Act

Citing the “driver shortage” as its motivation, a bill has been introduced that would give tax credits to truck drivers who qualify.

In late March, Rep. Patrick Ryan, D-N.Y., introduced HR2391. The bipartisan bill was co-sponsored by Reps. Zachary Nunn, R-Iowa, and Mark Amodel, R-Nev.

The bill would create a refundable tax credit of up to $7,500 for current truckers who drive at least 1,900 hours a year. It also would establish an enhanced tax credit of up to $10,000 for new truck drivers and individuals in trucking apprenticeship programs.

The tax credit would last only two years and would be available only to those who fall under certain income thresholds.

“Truck drivers keep the American economy moving forward,” Ryan said in a news release. “They work long, hard hours with little support to make sure that people across the country have everything that they need for daily life. “It’s no wonder that job retention rates in the industry are declining. We have to be encouraging more people to sign up to drive and stay there, which is why providing incentives like this is so important. Keeping more skilled drivers on the road will also help combat supply chain issues, which jack up prices for American consumers.”

However, multiple studies in recent years have debunked the driver shortage claim. Plus, the trucking industry has been in a freight recession since 2022 and has been suffering from a persistent overcapacity issue.

What large fleets call a “driver shortage” is said to actually be a driver turnover problem that stems from low pay and poor working conditions. LL