Bill Introduced to Place More Tax on Diesel Fuel

April 26, 2012

As if the price of diesel, repairs, taxes, insurance, and other things a trucker must pay is not high enough, a bill was introduced in the House of Representatives to increase the diesel fuel tax rate 6.3 cents per gallon. The authors of this bill were Rep. Jim Gerlach , a Republican from Pennsylvania and Rep. Earl Blumenauer, a Democrat from Oregon.

In exchange, this increase would replace the 12% federal excise tax now charged on retail sales of heavy trucks, dump trucks, trailers and semitrailer bodies, heavy truck body chassis, and tractor trailers.

Both the NTEA and the ATA are supporting this bill. They have stated that the current 12% FET is detrimental to truck sales. The rational by both the politicians and the trucking associations is that it would help the trucking industry to better meet the needs of converting their vehicles to meet the new environmental standards, maintain highways, and help "strengthen the industry".

All monies current collected from the FET and fuel sales go to a highway trust fund, which constructs and maintains the nation's highways and bridges. By eliminating the FET and adding on to the price of diesel, every truck driver will be affected. It will obviously increase the cost per mile to deliver freight.

The ATA president states that the bill would, "…provide a boost to U.S. manufacturing and speed adoption of environmentally friendly technologies." NTEA stated, "FET serves as a very unstable source of revenue…When truck sales drop the FET revenue..drops in a corresponding manner" and "The fuel tax provide a significantly more stable source of revenue for federal budgeters."

At the current time when a person purchases a truck, trailer, or related parts this 12% FET is charged. However, it is a onetime charge. Any increase in diesel fuel, on the other hand will go on forever until there is a reason to raise it again. That, together with all the environmental changes that are being required of truckers may very well be the straw that breaks the camel's back. Most certainly, it will increase the cost of hauling freight.

An April 3, 2012 report shows that currently the automobile driver is paying an average of 49.5 cents in direct tax per gallon for gasoline at the pump. The trucker is paying an average of 54.6 cents, which is higher than it was in January. The states charging the highest in gasoline taxes are New York at 69.6 and California with 69.0. The highest state taxing diesel was California at 79.5 and Indiana at 76.2 cents a gallon. The lowest state for gasoline and diesel taxes is Alaska.

Building highways and bridges is an expensive proposition. However, it boggles the mind to think the thousands and thousands of trucks and other vehicles that travel the highway every day and are paying that much per gallon for fuel tax. This is in addition to the cost of vehicle upkeep. With the basic cost of fuel currently at an all time high, it will be interesting to see if this bill passes.

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