May 2025—The American Transportation Research Institute (ATRI) has released new findings that bolster long-standing industry calls to repeal the federal 12% excise tax on heavy trucks and trailers. The institute argues that eliminating the tax would reduce costs, modernize fleets, and boost safety and efficiency across the U.S. trucking industry.
Known as the Federal Excise Tax (FET), the surcharge has been in place since 1917. It was initially enacted to help fund World War I. Today, it’s the highest percentage-based federal tax on a product and can add $20,000 or more to the cost of a new Class 8 truck.
Economic Drag on Trucking
ATRI’s report highlights the FET’s role in inflating the price of new equipment, especially as inflation and regulatory compliance already drive up the base cost of new trucks. This tax can be the barrier that forces many small fleets and owner-operators to delay equipment upgrades, despite the clear benefits of newer, cleaner, and safer vehicles.
“This outdated tax discourages the purchase of modern, fuel-efficient, and low-emission trucks at a time when the industry and regulators are pushing for cleaner fleets,” the report states.
A Barrier to Emissions Goals and Safety
In an era of increasingly strict emissions regulations from the EPA and states like California, ATRI argues that the FET directly undermines environmental progress by making it harder for fleets to afford new technology, including electric and hybrid trucks.
Additionally, newer trucks offer advanced safety features such as automatic emergency braking, lane departure warning, and improved visibility — all of which reduce accidents and fatalities. By disincentivizing fleet turnover, the FET inadvertently keeps older, less-safe equipment on the road longer.
Bipartisan Support Growing
A growing coalition of lawmakers, trade groups, and industry advocates has supported repealing the FET. Legislation introduced in Congress, such as the “Modern, Clean, and Safe Trucks Act,” has aimed to eliminate the tax entirely, citing both economic and safety reasons.
Opponents of the repeal argue that the FET is a vital source of revenue for the Highway Trust Fund, which supports infrastructure projects nationwide. However, ATRI’s report suggests that any revenue loss could be offset by increased truck sales volume, job growth in manufacturing, and a more efficient, lower-maintenance freight system.
Looking Ahead
With the trucking industry facing higher costs from tariffs, insurance hikes, and stricter emissions mandates, ATRI’s findings may serve as a rallying point for reform. Fleets and manufacturers alike see the repeal of the FET as a smart step toward affordability, modernization, and sustainability.
As policymakers debate the future of infrastructure funding, the trucking industry urges them not to overlook a straightforward change with powerful impact: end the tax that punishes progress.
