Owner-operators seek one-year suspension of heavy vehicle tax

Small-business truckers are countering a tax proposal by their big-business counterparts with one of their own: Suspend the heavy vehicle use tax (HVUT) — a better way to provide relief to the industry than suspending the federal excise tax (FET), they contend.

In a Thursday letter to congressional leaders, the Owner-Operator Independent Drivers Association (OOIDA) argued that a one-year suspension of the HVUT — an annual fee that costs about $550 per truck — would help every trucking business, large or small. By contrast, suspending the FET on the purchase of a new truck, which can cost upwards of $100,000, only benefits companies with big wallets.

“For small businesses wondering how they’ll make next month’s insurance payment or pay for fuel, they will never see any benefit from an FET suspension,” OOIDA President and CEO Todd Spencer stated in the letter.

“An FET suspension would also create a significant shortfall in the Highway Trust Fund, and we have questions with how this would be backfilled. If there are new industry-wide fees or taxes to pay for an FET suspension, then all trucking companies, regardless of whether they benefitted from the FET suspension, would be responsible for its offset.”

The latest effort to temporarily suspend the 12% FET on new truck purchases has been ongoing since April. Led by the National Automobile Dealers Association, the effort is supported by trade groups and private companies that include the American Trucking Associations, truckload carrier Werner Enterprises and truck manufacturer Navistar.

The goal of both initiatives is to get the respective proposals included in the next COVID-19 relief package.

“While some trucking operations have been able to qualify for pandemic assistance through the Paycheck Protection Program or Economic Injury Disaster Loan program, many others have not been able to for one reason or another,” Spencer wrote. “Suspending the HVUT would bypass the complications of these programs and provide a simple way to make sure that all truckers get relief.

Backers of suspending the FET cite the ongoing collapse of truck sales — now at a 25-year low — as an opportunity for a stimulus led by suspension of the tax. 

“To jump start the economy after the pandemic, a suspension of the burdensome FET, which increases the cost of new heavy-duty trucks and trailers by $22,000 on average, would immediately spark the purchase of heavy-duty trucks and trailers,” according to supporters of suspending the FET.

Republicans in the U.S. Senate and Democrats in the U.S. House, meanwhile, are far apart on negotiations for a next COVID-19 aid package. The House passed a $3 trillion relief plan last month, and the Senate answered this week with a $1 trillion plan. A $600 weekly unemployment benefit that was part of the first relief package is set to expire today.

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