Last month, a large group called the Modernize the Truck Fleet coalition started to make a push to eliminate the federal excise tax on the trucking industry.

The tax costs the trucking industry roughly $3 billion every year, with the money going to the Highway Trust Fund.

While lawmakers have been quick to dismiss previous pushes to reduce or eliminate the federal excise tax, the new coalition has a different approach.

What is the Federal Excise Tax?

The federal excise tax was initially created to help pay for expenses during the First World War, over a century ago. In the 1950s, the tax was linked to the Highways Trust Fund, and the money was used to build and maintain roads and bridges across the country.

To put things in perspective, the tax was only 3% in 1955. Today, the excise tax on the trucking industry has grown to 12% and is levied on the sale of new trucks with a total vehicle weight of 33,000 pounds or more.

Some analysts have stated that the federal excise tax on the trucking industry is the highest in the country.

Why eliminate the federal excise tax?

At 12%, the tax adds between $12,000 and $23,000 to the cost of a truck. The Modernize the Truck Fleet coalition claims that eliminating the high tax would free up capital that trucking companies would use to upgrade vehicles or purchase trucks that are safer and more fuel-efficient.

If the trucking industry as a whole saves $3 billion instead of paying an tax, they could also reduce pollution by switching fleets over to vehicles with more advanced engines that use cleaner fuel.

Additionally, the new vehicles with airbags and driver-assist technology would make the roads safer for everyone.

The coalition has proposed alternative solutions for funding the Highway Trust Fund that are more consistent and user-based, without penalizing the trucking industry.

The new legislation may open up the doors to a more comprehensive infrastructure bill to maintain and make our highways more efficient. HR 2381, The Modern, Clean, and Safe Trucks Act of 2019, can be found here.