Lawmakers Renew Effort to Eliminate Federal Excise Tax on Heavy-Duty Trucks

Industry Leaders Say Century-Old Tax Is Hindering Fleet Modernization

A bipartisan group of U.S. senators has renewed efforts to eliminate the federal excise tax (FET) on new heavy-duty trucks, tractors, and trailers, reviving a long-standing priority for the trucking industry. The proposal targets a tax that dates back to World War I and has been criticized for decades as an obstacle to fleet investment, safety improvements, and environmental progress.

The legislation, known as the Modern, Clean and Safe Trucks Act, was introduced on June 2 by Senator Todd Young (R-Ind.) and seeks to repeal the current 12% federal excise tax imposed on qualifying commercial vehicles. The bill has been referred to committee for consideration, continuing a legislative effort that has surfaced repeatedly in Congress but has yet to become law.

High Costs Continue to Impact Fleet Replacement Decisions

Supporters of the legislation argue that the federal excise tax significantly increases the purchase price of new commercial vehicles, often adding between $15,000 and $30,000 to the cost of a truck or trailer. In an industry already facing rising equipment costs, financing challenges, labor shortages, and regulatory pressures, many fleets particularly smaller carriers delay equipment purchases because of the additional expense.

Industry advocates maintain that the tax discourages fleet turnover and unintentionally keeps older trucks on the road longer. As a result, carriers may postpone investments in vehicles equipped with the latest safety technologies, fuel-efficient engines, emissions-reduction systems, and driver-comfort features.

According to Senator Young, the tax places an unnecessary burden on small businesses and owner-operators who form the backbone of the American trucking industry. He emphasized that eliminating the tax would encourage investment in newer equipment while improving highway safety and reducing emissions.

Bipartisan Support Centers on Safety and Sustainability

Senator Angela Alsobrooks (D-Md.), a co-sponsor of the bill, described the federal excise tax as an outdated policy that works against modernization efforts. She noted that removing the levy would help accelerate the adoption of safer and more fuel-efficient trucks while supporting broader environmental objectives.

As commercial vehicle manufacturers continue introducing advanced diesel, natural gas, and zero-emission technologies, supporters argue that reducing acquisition costs is essential for encouraging fleets to invest in next-generation equipment. Many industry stakeholders believe repealing the tax could accelerate the transition toward cleaner transportation while strengthening fleet productivity and reliability.

Similar House Proposal Remains Under Consideration

A companion bill introduced in the House of Representatives last year also remains under review. Representative Chris Pappas (D-N.H.), a supporter of the House measure, has repeatedly highlighted the bipartisan nature of the proposal and its potential benefits for supply chains and small businesses.

Advocates argue that reducing the financial burden associated with purchasing commercial vehicles would stimulate investment throughout the transportation sector, helping carriers expand capacity, improve operational efficiency, and better meet growing freight demand.

Trucking Organizations Applaud Legislative Action

The proposal has received strong support from trucking and dealership organizations that have long pushed for repeal of the tax.

The American Trucking Associations (ATA) has consistently argued that the federal excise tax is one of the most costly and counterproductive taxes affecting the industry. Originally established to help fund World War I efforts more than a century ago, the tax remains one of the few excise taxes still applied directly to heavy-duty commercial vehicle purchases.

ATA President Chris Spear stated that eliminating the tax would allow fleets to modernize equipment faster, delivering benefits that extend beyond transportation. Newer trucks generally offer enhanced safety systems, improved fuel economy, reduced emissions, and better working conditions for drivers.

Industry leaders also point out that increased purchases of new trucks and trailers would support domestic manufacturing jobs, boost dealer activity, and strengthen the broader transportation supply chain.

Dealers Call Tax Outdated and Punitive

Truck dealers have echoed similar concerns. Kevin Holmes, Chairman of the American Truck Dealers and President and CEO of Advantage Truck Group, described the federal excise tax as an outdated and inefficient policy that routinely adds more than $20,000 to the cost of a new heavy-duty vehicle.

Holmes emphasized that the trucking industry is already navigating economic uncertainty, fluctuating tariffs, supply chain challenges, and evolving regulations. In that environment, he argued, policymakers should reevaluate tax policies that discourage investment in modern equipment.

According to dealers and fleet operators, removing barriers to vehicle replacement would not only stimulate economic growth but also help put cleaner, safer, and more technologically advanced trucks on America's highways.

A Critical Debate for the Future of Trucking

As freight transportation continues to evolve, the debate surrounding the federal excise tax remains closely tied to larger industry priorities, including fleet modernization, driver safety, emissions reduction, and supply chain resilience.

Supporters of the Modern, Clean and Safe Trucks Act believe repealing the tax would provide immediate financial relief to carriers while encouraging long-term investment in advanced transportation technologies. Whether Congress ultimately moves the legislation forward remains uncertain, but the renewed bipartisan push signals that the future of the federal excise tax will remain a major topic of discussion throughout the trucking industry in the months ahead.