The Owner-Operator Independent Drivers Association (OOIDA) is placing pressure on Congress to either eliminate or suspend two trucking taxes to provide economic relief to carriers and independent drivers.
Heavy Vehicle Use Tax
Among trucking taxes the Heavy Vehicle Use Tax places one of the largest financial strains on owner-operators and fleets nationwide. In broad strokes, the Heavy Vehicle Use Tax is a $550 fee levied per year, per vehicle in use. Proportionally, owner-operators and small trucking companies feel a larger strain than bigger fleets compared to the amount of revenue coming in. But no matter the size, suspending the Heavy Vehicle Use Tax would allow the trucking industry to retain capital that could be put to efforts such as hiring, growth, marketing, vehicle maintenance, or anything else needed to keep the industry moving.
Federal Excise Tax
The Federal Excise Tax on the trucking industry is, by percentage, the highest tax of its kind. Much like the Heavy Vehicle Use tax, the Federal Excise Tax levies fees on trucking equipment, specifically for new vehicles, resulting in an average of $20,000 per new vehicle purchased. Purchasing new vehicles has been on a downward trend for over a year, and data from the ATA shows that roughly 60% of fleets would consider purchasing new vehicles if trucking taxes were suspended or eliminated. At a time of economic instability, suspending trucking taxes would give fleets and owner operators more financial stability.
Trucking Taxes and the Bigger Picture
Boosting the economy starts at the foundation, not at the top. The trucking industry is that foundation. The trucking industry moves products and raw materials for every business in the United States. By burdening fleets and owner-operators with heavy trucking taxes, and economic rebound and further economic growth will, at the very least, be delayed. If Congress eases, lowers, or suspends trucking taxes, the freight industry will be able to operate more efficiently, and if the foundation of our economy can retain more capital, then other businesses will be able to get back on their feet much faster.
Express Freight Finance will continue to follow this topic for further developments.