The National Trailer Dealers Association (NTDA) is joining forces with the American Truck Dealers Association (ATD) and the “Modernize the Truck Fleet” Coalition to further fight Federal Excise Tax (FET). There is optimism among the members of this Coalition that now is the time to actively effect change to the law. The Coalition currently includes ATD, the National Truck Equipment Association (NTEA), the Truck Renting and Leasing Association (TRALA), and the Engine Manufactures Association (EMA).
More than 10 years ago, the U.S. Department of Transportation made the announcement that the Highway Trust Fund had run out of money. In the decade since, the collection of FET, gasoline and diesel taxes are still not the answer to keeping the fund afloat and the nation’s infrastructure continues to crumble.
As of 2021, the Highway Trust Fund will be insolvent. As Congress begins to draft several infrastructure bills over the upcoming months, it will have to address the funding shortfalls of the Highway Trust Fund that potentially include raising the gas tax, indexing the gas tax, replacing the gas tax with a mileage-based tax, and potentially eliminating and replacing FET. While it is likely that Congress will pass a short-term spending bill to keep the Trust Fund afloat, a long-term solution must be put in place.
Senators Doug LaMalfa (R-CA) and Cory Gardner (R-CO) are expected to introduce legislation in April 2019 similar to S. 3052 in that was proposed in 2018 to repeal the 12-percent federal excise tax (FET) on the sale of heavy-duty trucks and trailers. The Coalition is currently seeking bi-partisan support for the bill. LaMalfa and Gardner have both acknowledged that the FET on heavy trucks and trailers, “Is the highest excise tax Congress levies on a percentage basis on any product, including alcohol and tobacco.”
FET is an unfair method of taxing the trailer industry and it limits the purchase of newer, safer and greener trailers and parts — all of which are boons to the economy. As increasing legislative burdens are mandated by the EPA, CARB and other government agencies, the costs of heavy-duty trucks and trailers continues to increase making FET that much more burdensome. As we fight to make FET fairer, clearer and less burdensome, we remain available to help our members navigate the many complexities of this tax.
NTDA Working for You
The NTDA has supported open discussions and proposals to amend the laws governing FET since a small group of dealers came together in 1990 to form the Association. FET has long been an unfair method of taxing the truck and trailer industry. Federal excise taxes bring in just over $100 billion a year — about 3% of annual federal spending. Most come from the sale of trailers, trucks, plus fuel, airline tickets, tobacco and alcohol. An excise tax is an indirect tax, meaning the tax is not directly paid by the consumer but by the maker or you, the merchant. The federal government has used excise taxes to boost revenues since the Washington presidency onward.
Though the FET on heavy-duty trucks and trailers has been around since World War I, there’s still a lot of confusion over when it applies and how it should be calculated. All NTDA members get unlimited access to our Federal Excise Tax Compliance Hotline. For more information, contact NTDA President Gwen Brown at 1-800-800-4552 or e-mail firstname.lastname@example.org.
Over the years, The NTDA has been here to help you stay in compliance and to limit your exposure by providing a Federal Excise Tax Compliance Hotline, free Webinars, information, articles and other resources. As we fight to make FET fairer, clearer and less burdensome, we remain available to help our members navigate the many complexities of this tax. The NTDA Web site, www.ntda.org also contains links to specific IRS publications and resources, as well as guidelines on how to “ace” an IRS Federal Excise Tax exam.
In addition, thanks to our partnership with CliftonLarsonAllen, LLP, your dealership can schedule an FET review service. This can help determine if you are in full compliance with IRS rules as well as clarify any concerns regarding how much FET to collect on the trailer, trailer parts and accessories.
The Dealer members of the NTDA Board of Directors recently issued letter asking our members to join them in making a voluntary donation to help fund this effort. If we do not take a seat at the table, we cannot complain when any changes to the law do not benefit our members or the trailer industry. For more information or to donate, visit https://ntda.org/advocacy/fet-repeal/.
Hopefully the time is right, and changes can be made that will if nothing else make the law easier to understand without so many parts that are open for interpretation.