Industries Seeking Tax Relief

While many sectors of the U.S. economy are reopening in the coming weeks, there are still concerns on how the economy will rebound. The trucking industry is seeking relief in a big way as they hope to push off the Federal Excise Tax (FEX) on new heavy-duty trucks and trailers through 2021.

Many obstacles have plagued the transportation industry during the last 18 months, including driver retainment and freight pay decreases. Those along with many other factors have contribattributed to hundreds of companies shutting down. Industry organizations including the American Truck Dealers believe the suspension of the 12% FEX will help bolster new truck sales as the industry recovers from  the impact of COVID-19.

There are members of legislature that have been pushing to repeal FEX since 2019.  One of those representatives includes Congressman, Doug LaMalfa R-Calif., who said, “when the federal excise tax was introduced over 100 years ago, it was to help pay the costs of fighting World War I. Today, it has quadrupled from 3% to 12%, and the Ottoman Empire is no longer around. It’s an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner and safer vehicles.” From a fiscal standpoint there is reason to believe that if the FEX is not put on hold, our highways will continue to be filled with tractor trailers that are about 10 years old. The 12% FEX is reported to increase the cost of new trucks and trailers by $22,000 on average, according to Fleetowner magazine. Over 116 industry organizations that signed a letter to Congress that claim, with this tax on hold there will be a jolt of new truck sales which would put safer and cleaner trucks out on the roads.

As industries far and wide clamber for federal relief, it will be interesting to see where the government allocates its resources in hopes to re-open the economy.

 

https://news.bloombergtax.com/daily-tax-report/industries-pushing-for-targeted-tax-relief-in-pandemic-bills

https://www.ttnews.com/articles/excise-tax-relief-would-benefit-trucking-atas-chris-spear-says

https://www.fleetowner.com/news/article/21130516/trucking-industry-seeks-fet-relief-during-economic-recovery

https://transportationtodaynews.com/news/17954-trucking-industry-seeking-suspension-of-federal-excise-tax-on-heavy-duty-trucks-trailers/

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