Part of this process involves reducing and/or raising taxes on certain products. is in the process of renegotiating trade arrangements with China. These exemptions may include but are not limited to farm machinery, forestry vehicles, off-road vehicles, tractors or ATVs (all-terrain vehicles).įET is in the news mostly because the U.S. government website.Īny tires that are not used for road travel are exempt from this tax. Details of how the tax is calculated can be found on the U.S. The FET is levied typically against medium and heavy-duty truck/trailer tires with a maximum load capacity greater than 3,500 pounds. In particular regard to truck tires, the FET is imposed on tires strictly manufactured for and used on the public roadways.
OEMs and dealers are already offering price and financing incentives to stimulate sales, so no FET helps reduce the risk of purchasing trucks, but doesn't eliminate it."Īke said risks will still be elevated in the second half of 2020 due to the pandemic, economic uncertainty and the election.FET is an acronym that simply stands for federal excise tax. "The effects here could be somewhat muted in the short-term. "Any reduction in real price will stimulate some demand," Ake said. "I'm just not seeing the big advantages here," said Feigenbaum, explaining the suspension might cause a sales rush, but once the tax was reinstated, the market could be depressed for a year or more.įeigenbaum said the suspension would be another "whack" at the troubled and shrinking Highway Trust Fund.ĭon Ake, VP of commercial vehicles for FTR, told Transport Dive in an email that the stimulative part of the FET suspension is plausible, but perhaps not as big as the trade groups want. Analysts like Feigenbaum are not sure how big the benefits would be. The FET suspension would be temporary, and the goal is to stimulate truck sales. "I'm not even sure you can raise the gas tax by 5 cents." "Politically, it's not going to happen," said Feigenbaum. The ATA supports an increase in the fuel tax, which stands now at 18.4 cents per gallon, unchanged since 1993.īut making up for lost FET revenues with a higher fuel tax is wishful thinking, Baruch Feigenbaum, s enior managing director of transportation policy for the Reason Foundation, told Transport Dive.
Fet tax on trailers drivers#
"We do not oppose a repeal or suspension but suggest that lawmakers come up with an offset for the lost revenue," said Norita Taylor, director of public relations for the Owner-Operator Independent Drivers Association. "We would oppose any waiver or relief that would result in the imposition of new or higher taxes on small business truckers, who are least likely to benefit from any FET changes." Proponents of the suspension say new truck buying could decrease carbon emissions, because newer models tend to be more fuel efficient. On July 16, Volvo Group reported its North American deliveries fell 79% in Q2 2020. But it was the second quarter, during the first months of the pandemic, that was particularly bad. That compares to 490,100 orders in 2018, during the freight boom year, and 179,0. Class 8 sales totaled 158,000 for the 12 months ending June 30, according to FTR. The industry says it's time for relief to stimulate buying, as the COVID-19 pandemic idled OEMs and dropped freight volumes, resulting in a steep drop in truck sales. The tax was devised in 1917 to help pay for World War I, and it stood at 3% then. It adds 12% to new sales, which is about $22,000 per tractor-trailer. The FET is a hated tax within some trucking industry circles. In May, the groups said they had joined with 115 other business organizations to push Congress for wider, industry-specific aid in the next coronavirus relief bill. The letter is a sign the lobbying effort by the American Trucking Associations (ATA) and the American Truck Dealers (ATD) is having effect.
Fet tax on trailers full#
Doug LaMalfa, R-Calif., said the tax was overdue for full repeal. The Congress has to act soon, or unemployment benefits will run out later this week. It's unclear when Congress will pass its fourth round of coronavirus-related relief, but Senate Republicans will soon unveil their counterpart to a House bill passed in May.
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