Truck Excise Tax Revisited: New Hope for Full Repeal

Lawmakers Push to Repeal Truck Excise Tax That Adds Thousands to New Rigs

On March 27, 2025, five members of the U.S. House of Representatives reintroduced the Modern, Clean, and Safe Trucks Act of 2025, which would eliminate the 12% federal excise tax (FET) on the sale of new trucks and trailers. Leading the effort are Rep. Doug LaMalfa (R-California) and Rep. Chris Pappas (D-New Hampshire), joined by Reps. Darin LaHood (R-Illinois), Salud Carbajal (D-California), and Max Miller (R-Ohio).

The FET has been around since 1917. It was originally created to help pay for World War I. Over 100 years later, critics say the tax is outdated and hurting the trucking industry.

The Cost of the Federal Excise Tax

Right now, the 12% tax applies to new heavy-duty trucks, trailers, semitrailer chassis, and other commercial vehicles used on highways. Depending on the purchase price, the tax can add anywhere from $15,000 to $30,000 to the cost of a new rig.

“This is the highest percentage-based tax Congress imposes on any product, yet it fails to be a reliable source of funding for the Highway Trust Fund,” said Rep. LaMalfa. It “punishes truck buyers” and makes it harder for them to modernize their equipment.

Because of this added cost, many truck buyers turn to older, used models, which are not subject to the tax. Lawmakers and industry leaders say this delays the adoption of newer trucks that are more fuel-efficient, safer, and better for the environment.

Industry Backing to Repeal the Excise Tax

The American Trucking Associations (ATA) strongly supports the bill. According to the group, the tax creates a $6 billion yearly burden on the industry.

“Keeping this antiquated tax on the books imposes an enormous hardship, particularly for small fleets, family businesses, and independent truckers,” said ATA President and CEO Chris Spear. “Removing this burden will allow motor carriers to replace their trucks with modern, safer, and cleaner equipment, which will in turn provide a boost to manufacturing jobs.”

Spear noted that the FET now adds around $24,000 to the price of a new clean-diesel tractor-trailer, discouraging many from upgrading their vehicles.

Impact on Safety, Jobs, and the Environment

Truck industry leaders argue that removing the tax could make a big difference. In recent, written testimony, John Elliott, executive chairman of Load One and former chairman of the Truckload Carriers Association, pointed out that the FET is slowing down fleet upgrades.

“The high cost of the FET slows fleet modernization, directly impacting safety and environmental goals,” Elliott said. He also cited data showing that 60% of fleets would be somewhat or very likely to purchase more trucks if the FET were eliminated.

Newer trucks are typically built with advanced safety technology, better fuel economy, and lower emissions. Supporters of the bill argue that lifting the FET would lead to more trucks on the road that meet these higher standards.

Excise Tax Repeal: A Long Road in Congress

This isn’t the first time lawmakers have tried to repeal the FET. Similar bills have been introduced in past sessions of Congress but have failed to gain enough traction.

Supporters are hoping this time will be different. With bipartisan backing and strong support from major industry groups, they believe there’s a growing understanding in Congress about the need to modernize the trucking tax system.

“Let’s repeal this outdated tax and support the men and women who keep America moving,” said Rep. LaMalfa.

For now, the bill heads to committee, where lawmakers will consider the next steps. While there’s no guarantee it will pass, the pressure is mounting from within the industry to finally put the century-old tax to rest.