Tax repeal could lead to safety and environmental benefits

Benefits of the FET repeal

The main benefits of the repeal include:

• Environmental benefits: Trucking industry CO₂ emissions would decrease at an estimated 1.2 million metric tons per year, ATRI says. This totals 66 million fewer metric tons of CO₂ over 10 years.
• Safety benefits: Replacing older trucks more quickly reduces safety technology costs, generating more Advanced Driver-Assistance Systems (ADAS) equipment purchasing. ATRI estimates there would be about 750 fewer annual vehicle crashes as a result, saving close to $13.5 billion in crash costs over 10 years.

In addition, ATRI’s report finds that the Truck FET revenue generated for the Highway Trust Fund comes with limitations that could be replaced with less volatile funding choices.

Background and research efforts

The Truck FET is a World War 1 era tax on new trucks. This tax adds an approximate $20,000-50,000+ in additional costs to each new truck purchased. The added cost acts as a deterrent to sales of new trucks and trucking equipment.

ATRI research involved estimating the age and annual mileage of Class 8 trucks in the U.S. to understand what influence older trucks had on both safety and environmental impacts.

The report aims to help justify the repeal of the 12-percent FET on new trucks to help improve:

• Annual sales for dealers,
• Customers’ ability to improve their fleets, and
• Environmental and safety concerns across the industry.

Full report: Repealing the Federal Excise Tax on New Truck Equipment: Impacts and Opportunities for Industry Safety and Operations