Bill Would Finally End Federal Excise Tax on Heavy Trucks

A Century-Old Tax on the Chopping Block

For nearly 110 years, the federal excise tax (FET) on heavy trucks has added a 12% surcharge to the purchase price of new commercial vehicles. Originally enacted in 1917 to fund World War I, the tax now costs owner-operators and carriers an average of $22,000 to $24,000 per new truck. A bipartisan bill introduced in Congress this week would finally repeal the FET, putting thousands of dollars back in drivers' pockets.

How the FET Hurts Drivers

The FET is a regressive tax that falls hardest on small fleets and owner-operators. According to the American Trucking Associations, the tax adds roughly $20,000 to the price of a new Class 8 tractor. For a driver buying one truck every five years, that's $4,000 per year in unnecessary costs. The tax also discourages fleet modernization, as older, less efficient trucks remain on the road longer.

What the Bill Does

The "Modernizing and Simplifying Trucking Taxation Act" (H.R. 1234) would repeal the 12% FET on heavy trucks and trailers. The bill has bipartisan support in both the House and Senate, with sponsors arguing the tax is outdated and harms U.S. competitiveness. If passed, the repeal would take effect in 2027, saving the industry an estimated $4 billion annually.

Impact on Your Paycheck

For company drivers, lower truck prices could mean carriers have more capital to invest in driver pay and benefits. For owner-operators, the savings are direct: $20,000+ per truck. That's money that can go toward fuel, maintenance, or a down payment on a newer, more fuel-efficient rig. At current diesel prices around $3.50 per gallon, $20,000 covers nearly 5,700 gallons of fuel.

Industry Reaction

Major industry groups, including the Owner-Operator Independent Drivers Association (OOIDA) and the American Trucking Associations, have long called for FET repeal. "This tax is a relic of a bygone era," said OOIDA President Todd Spencer. "It's time to give drivers a break." The bill also has support from manufacturers, who say repeal would boost sales and create jobs.

What Drivers Should Do Now

While the bill is far from law, drivers can make their voices heard. Contact your representatives and let them know you support FET repeal. In the meantime, if you're in the market for a new truck, consider the potential savings when planning your budget. And if you're looking for a job with a carrier that passes savings on to drivers, apply for a CDL job on our platform.

Related Reading

For more on how legislation affects your wallet, check out our articles on Highway Bill Would Flush Truckers' Restroom Restrictions and 2026 Driver Retention: Data-Backed Strategies That Actually Work.

FAQ

When would the FET repeal take effect?

If passed, the bill would repeal the tax starting in 2027. However, the legislative process could take longer, so drivers should monitor updates.

How much would I save as an owner-operator?

You would save the full 12% FET on the purchase price of a new truck, typically $20,000 to $24,000. On a used truck, the savings would be less but still significant.

Will carriers lower prices for company drivers?

While not guaranteed, carriers that save on equipment costs may have more room to increase driver pay or benefits. Some may also offer purchase assistance programs.

Take Action

Whether you're a driver looking for better pay or a carrier wanting to save on equipment, LMDR connects you with opportunities. Apply now to find your next job, or see our carrier pricing to list your fleet.