The FET has grown from 3 to 12 percent since it was instituted in 1917 to help fund World War I, and with many fleet tractors ringing registers for around $150,000, it tacks an extra $18,000 onto most Class 8 trucks.
With the revenue tied to the Highway Trust Fund, an account used to help states with infrastructure maintenance and construction, Jerry Kocan, dealer principal for Four Star Freightliner says the tax also is unfair since those charged with paying it see limited returns from its proceeds.
“Customers who pay that excise should see some direct benefit, [such as] road or infrastructure improvement, less tolls, fees reduced, etc., or charging the commercial users on a usage basis as they now do with fuel would be workable,” Kocan says. “Remember, this tax was put in over 100 years ago as a war tax and has not really directly benefited those who have paid the majority of this tax.”
In response to the current negative business environment, many carriers canceled truck (23 percent) and/or trailer (17 percent) orders and are unlikely to re-file those orders in 2020, according to a survey conducted by CCJ, sister publication of Trucks, Parts, Service, that measures the coronavirus’ impact on motor carriers. Approximately 60 percent of the companies who canceled truck and trailer orders reported they do not plan to order those assets this calendar year.
However, a recent survey conducted by the American Truck Associations (ATA) revealed that nearly 60 percent of fleets were somewhat or very likely to buy additional trucks and/or trailers beyond their scheduled buy if the FET were eliminated.
Kocan says the FET has long been a deterrent for buying new trucks.
