Posted on: Apr 12, 2012
A bill introduced by Congress this week is proposing the cutting of the excise tax on heavy trucks and replacing it with increases to the diesel fuel tax. The proposed legislation would repeal the 12 percent excise tax and replace the revenue by raising the diesel fuel tax to 6.3 cents. Although the bill has some bipartisan support, the majority of the House as well as the White House oppose raising federal fuel taxes.
This legislation really brings to attention the need to find additional revenue to replenish the Highway Trust Fund, which gets 90 percent of its funds from federal fuel taxes. House Republicans would like to see the additional funds come from gas drilling and exploration, a move Democrats oppose. Several states are already jumping the gun and raising state fuel taxes independently, with little to no success thus far. The bill comes with the support of the American Trucking Association (ATA), which sees the proposal as a way to boost U.S. manufacturing and cut operational costs. The elimination of the excise tax would save an average of $15,000 per truck purchase price, alleviating some of the financial burden for the owner-operators. Stay tuned as more information becomes available.