Dennis Dellinger, president and CEO of Cargo Transports and chair of the American Trucking Associations, called on Congress to repeal the federal excise tax (FET) on Wednesday.
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The FET was first enacted during World War I. It is a 12% tax on the sale of most heavy-duty trucks and trailers. More than $6 billion in FET was collected in 2023 from truck, trailer and semitrailer chassis, bodies and tractors sales. Industry organizations contend the tax is a barrier to the sale of new, more efficient tractors.
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"This tax has grown to be one of the highest excise taxes on any good in the United States," Dellinger says. "As it adds over $20,000 to the cost of a new $180,000 truck and $6,000 to the cost of a new $50,000 trailer, this onerous charge creates a disincentive to putting new equipment that is cleaner and safer than ever before on our nation's highways."
Dellinger challenged lawmakers to improve the nation's infrastructure and, at the same time, reform the federal Highway Trust Fund (HTF) to repeal the excise tax.
"Decades of underinvestment in our nation's transportation networks reduced the resiliency of our supply chains and eroded the United States' global economic competitiveness on the world stage," Dellinger says. "Trucking is the beating heart of the U.S. economy, but we can only be as efficient as the roads and bridges of the interstate highway system allow us to be."
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As of December, the Federal Highway Administration says it had more than $70 billion in the account. In the first nine months of 2024, the government spent on bridges and highways, Dellinger says, but that's still 24% less than in the same period in the year before the Infrastructure Investment and Jobs Act (IIJA) became law.
Dellinger called the IIJA the "largest investment in our nation's supply chain infrastructure in nearly a century," but said its execution was diminished by inflation and political distractions. He called on the subcommittee to, as the bill comes up for renewal in 2026, take into account rising construction costs, reducing government red tape and inefficiencies, and restoring the focus on projects of critical strategic importance.
The IIJA also included funding for state, national and local pilot programs to explore new revenue sources for the HTF, Dellinger says.
"Unfortunately, while directed to establish the advisory group within 90 days of enactment, the Biden administration failed to implement this provision," Dellinger says.
The ATA supports a user-pay system for the HTF, one that includes a more uniform application that applies across the classes to ensure fairness.
"The trucking industry is the leading payer into the HTF, contributing almost half of all revenues while representing less than 5% of road users," Dellinger says. "While the trucking industry is proud to pay our fair share, Congressional attention and action is necessary to ensure a lasting, viable and equitable revenue source for continued infrastructure investments."
HTF collections should also be based on verifiable metrics, such as highway and vehicle use, and include evasion prevention measures to minimize opportunities for tax or fee evasion, the ATA says. Furthermore, administrative simplicity should ensure efficiency and lessen the burden for highway users as well as processes that would drop barriers that would hinder interstate commerce.
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Also in his testimony, Dellinger asked lawmakers to help the trucking industry fill labor shortages. He says the industry calculated that 41,000 additional diesel technicians were needed in 2022, not including collision repair technicians and tire technicians.
"Long term, without additional skilled technicians to perform both regular and acute maintenance of trucks, our vehicles will be less safe and fuel efficient — and so will your automobile," Dellinger says. "It is imperative that we as a nation continue to be mindful of the importance of safe and inefficient freight transportation and its impact on the wellbeing of our nation."
This article was changed on Jan. 24, 2025.
