NWRA applauds Sens. Todd Young (R-IN) and Ben Cardin (D-MD) for introducing bipartisan legislation to eliminate the 12 percent federal excise tax (FET) on the purchase of new heavy-duty trucks. This tax adds on average more than $35,000 to the price of a new waste and recycling collection vehicle. As a primary member of the Modernize the Truck Fleet coalition, NWRA helped lead the effort to secure early support for the bill.
“We thank Senators Young and Cardin for introducing this important legislation that will benefit the waste and recycling industry’s service providers and suppliers,” stated NWRA President and CEO Darrell Smith. “This tax depresses sales of heavy-duty commercial trucks and delays the purchase of cleaner, safer and more fuel-efficient trucks.”
The FET is levied on top of the nearly $40,000 in additional costs resulting from the recent federal emissions and fuel economy mandates. Combined, these make it very difficult for small businesses to afford a new truck, which has the effect of keeping older trucks on the road long past their replacement dates.
New trucks have made significant reductions in particulate matter (PM) and nitrogen oxide (NOx) emissions. Heavy-duty trucks manufactured post-2009 reduced their PM levels by 90 percent. The Environmental Protection Agency has projected a 90 percent NOx reduction efficiency for all heavy-duty trucks starting with model year 2010.
More than half of Class 8 heavy-duty trucks on America’s roads are now more than a decade old. These outdated trucks lack technological advancements such as enhanced safety, fuel efficiency and heightened environmental standards that benefit the public.
The FET was first established more than 100 years ago to help pay for World War I. FET revenue is now dedicated to the Highway Trust Fund (HTF), but it has been the HTF’s most inconsistent funding source over the last 20 years due to the volatility of annual truck sales. This in turn has contributed to the instability of the HTF.