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You are here: Home / COVID-19 / Invest in Trucks and Equipment

Invest in Trucks and Equipment

June 24, 2020 By New York Truckstop Leave a Comment

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Non-fuel federal use taxes specific to the trucking industry cost companies over $6 billion a year. A large chunk of change in any year but given the significant cash flow crunches and uncertainty related to the Covid-19 pandemic, this year these taxes are rather onerous. Companies must ensure they are able to make payroll and keep the economy flowing throughout this crisis. Moreover, it is critical that fleets run the safest, cleanest trucks available and excise taxes often prevent companies from making such investments. To that end, temporarily suspending the following excise taxes should strengthen the supply chain, the economy, and the environment:

Federal Excise Tax (FET): This antiqued tax was adopted in 1917 to defray the costs of World War I and taxes trucking equipment at a rate of 12%, significantly reducing output and investment. It is the highest excise tax imposed by the federal government on any product or service. Not to mention, truck makers build their trucks in the US to serve the domestic market. Suspending this tax will incentivize companies to invest in new equipment helping domestic manufacturing, the environment, and safety.

Tire Tax: There is only a federal tax on tires for the trucking industry which is why most people have probably never heard of it.  This goes back to World War I efforts as well. Freezing this tax would save the industry about $800 million.

Heavy Vehicle Use Tax: This is assessed annually on heavy vehicles at a rate as high as $550. This must be paid as a lump sum and would save the industry almost $2 billion if suspended.

The trucking industry has been on the front lines during the pandemic heroically making sure that Americans have the food, medicine, protective equipment, and all other essentials needed to weather the storm. The federal government has a chance to thank them by reducing some antiquated and onerous tax burdens.

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Filed Under: COVID-19 Tagged With: COVID-19, Trucking Equipment, Trucking Industry

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