Truck Federal Excise Tax: ATRI Research Justifies Repeal

New ATRI Report Highlights Impact of Truck Federal Excise Tax Repeal

A new report from the American Transportation Research Institute (ATRI) shows that repealing the truck federal excise tax (FET) on new CMVs could lead to major safety and environmental improvements in the trucking industry.

The 12% tax, first introduced during World War I, currently adds between $20,000 to over $50,000 to the cost of a new truck or trailer. The report argues this extra cost discourages fleet upgrades and keeps older, less safe and less efficient trucks on the road.

Environmental Gains from Modern Fleets

According to ATRI’s research, repealing the Truck FET would lead to faster turnover of older trucks, resulting in significant reductions in carbon emissions. Newer diesel trucks are more fuel-efficient and emit far less CO₂ than older models. ATRI estimates that without the FET, the industry would reduce emissions by 1.2 million metric tons of CO₂ per year—totaling nearly 66 million metric tons over a decade.

The report also outlines the improvements in fuel economy over time. For example, a Class 8 truck in model year 2023 emits about 61.6 grams of CO₂ per ton-mile, compared to 100 grams for pre-2000 trucks. As newer trucks replace the oldest in the fleet, overall emissions would continue to drop.

Safety Improvements with Advanced Tech

ATRI also points to major safety benefits if the Truck FET is repealed. As truck prices drop, more fleets can afford to buy new trucks equipped with Advanced Driver Assistance Systems (ADAS). These safety features—such as automatic emergency braking (AEB), forward collision warning (FCW), and lane departure warnings—are proven to reduce crash rates.

The report estimates that a 20% increase in new truck sales, driven by repealing the tax, could prevent about 750 crashes annually, including up to 8 fatal incidents. This would lead to a savings of nearly $13.5 billion in crash-related costs over ten years.

Truck Federal Excise Tax Is A Flawed Funding Source

Despite raising $6.78 billion in 2023, ATRI argues the truck federal excise tax is not a reliable or fair method for funding the Highway Trust Fund (HTF). The tax only applies to new truck purchases, which means a small portion of highway users bear a disproportionate cost. Revenue from the Truck FET also fluctuates significantly depending on new truck sales, making it a volatile funding source.

In contrast, fuel taxes—which are paid more broadly across all highway users—provide a more consistent and fair revenue stream. The report suggests alternative approaches for filling the gap that would be left by a Truck FET repeal.

Industry Leaders Back Repeal of Truck Federal Excise Tax

Jacqueline Gelb, president of the American Truck Dealers, said the report “greatly reinforces one of the key justifications for repealing the FET on new trucks by quantifying the real-world benefits a repeal will have on the environment and highway safety.”

The report’s findings have added fuel to long-standing efforts to repeal the Truck FET, which has remained unchanged since 1983. As policymakers look to modernize transportation infrastructure and reduce emissions, the report could reignite interest in scrapping the nearly 110-year-old tax.

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