Dive Brief:
- Sen. Cory Gardner, R-Colo., introduced a bill to the Senate Wednesday that would repeal the 12% federal excise tax on the sale of heavy duty trucks. It is under review by the Finance Committee, FreightWaves reported.
- The House introduced a similar bill in May, H.R. 2946, which also repeals the tax. According to the text of the Senate bill, the average heavy duty truck is almost 10 years old, suggesting companies aren't replacing them as often as they should due to high costs.
- The American Truck Dealers and the National Auto Dealers Association both stated support for the repeal of the tax, with the ATD calling the repeal a "top legislative priority" in an op-ed.
Dive Insight:
The repeal of the excise tax could potentially save trucking companies thousands of dollars, and also allow auto dealers and truck dealers to cut bigger profits on the sale of big trucks. Not only that, but the repeal aligns with the goal of Republicans in Congress to deregulate, slash tax rates and encourage companies to invest in capital expenditures.
As former director of the National Economic Council Gary Cohn said yesterday at a Q&A hosted by the Washington Post, one of the big goals of the Republican tax law was to get corporations to invest in new projects, which he believes will jumpstart the economy and "will create jobs which will create more revenue."
The Senate bill notes that making it easier for trucking companies to buy new trucks could encourage "the replacement of older, less environmentally clean and less fuel economical vehicles" in favor of more sustainable, environmentally-friendly ones.