Repeal of heavy truck excise tax

Full Title:
Modern, Clean, and Safe Trucks Act of 2025

Summary#

This bill would repeal the 12% federal retail excise tax on new heavy trucks, tractors, and trailers. Its main change is to remove that tax from the tax code and make related technical changes so other tax rules no longer refer to it. The stated policy goal is to lower the upfront cost of new heavy vehicles and speed replacement of older trucks with cleaner, safer models.

  • Main change: repeal the federal excise tax that adds 12% to the retail price of new heavy trucks, tractors, and trailers.
  • The bill makes matching technical changes elsewhere in the tax code so those parts no longer refer to the excise tax.
  • The repeal would apply to sales and installations on or after the date the bill was introduced.
  • The bill’s findings say the tax can add thousands of dollars to vehicle prices (the text cites examples of $7,000 to $50,000 depending on the vehicle).
  • The bill notes excise-tax receipts go into the Highway Trust Fund and says receipts can vary; it does not include a replacement revenue plan.

What it means for you#

  • Buyers / Trucking companies / Owner-operators: This could mean lower upfront purchase prices for new heavy trucks, tractors, and trailers compared with today’s prices that include the 12% excise tax. How much lower depends on vehicle price and the dealer.
  • Manufacturers and dealers: This could make new trucks cheaper to sell. It may increase demand if buyers respond to lower prices. Dealers and manufacturers would need to update sales and tax paperwork.
  • Owners of older trucks: The bill is intended to make it cheaper to replace older trucks, which could encourage fleet turnover to newer engines and safety features.
  • Electric and alternative-fuel truck buyers: The bill’s text says the excise tax disproportionately affects higher-cost electric and alternative-fuel trucks, so repeal could reduce their upfront price gap.
  • Highway Trust Fund / road projects: The excise tax receipts are currently deposited into the Highway Trust Fund. Repealing the tax would reduce receipts to that fund unless another revenue source is provided.
  • Government tax administrators: The IRS and other agencies would need to update rules and systems to reflect the repeal and the conforming amendments.

Expenses#

No publicly available information.

  • The bill would remove a current source of federal revenue that is deposited into the Highway Trust Fund. The text notes receipts from this tax can vary, but it does not include a fiscal estimate of lost revenue.
  • The bill does not identify a replacement funding mechanism for the Highway Trust Fund. That implies either smaller Trust Fund receipts or a need for new revenue sources or offsets, but the bill itself does not say which.
  • There will be administrative costs to update tax forms, computer systems, and guidance because multiple sections of the tax code are changed. The bill does not estimate these costs.
  • Businesses that buy new trucks would see lower purchase costs; the bill does not estimate how that affects business expenses or long-term operating costs.

Proponents' View#

  • The bill appears intended to lower the upfront cost of new heavy trucks and trailers. That could make it easier for fleets to buy newer, cleaner, and safer vehicles.
  • Supporters may argue repeal would accelerate replacement of older trucks that lack modern emissions controls and safety features.
  • The bill’s findings claim the excise tax raises vehicle prices by thousands of dollars and that removing it would help adoption of electric and other alternative-fuel trucks that currently have higher purchase prices.
  • The bill suggests reducing the tax could support U.S. manufacturing, suppliers, dealerships, and trucking jobs by stimulating sales.
  • The bill also notes that excise-tax receipts to the Highway Trust Fund vary by year, and repeal could prompt consideration of a more stable funding approach.

Opponents' View#

  • One concern is the bill does not show how to replace the excise tax revenue that funds the Highway Trust Fund. Repealing the tax would reduce those receipts unless Congress adopts a replacement source.
  • The bill gives no fiscal estimate, so the size and timing of lost revenue and the effects on road and bridge funding are unclear.
  • It is unclear whether the repeal would mainly help small owner-operators, large fleets, or manufacturers; the distribution of benefits is not specified.
  • The bill does not include targeted incentives to ensure that lower prices lead specifically to replacing the oldest, highest-polluting trucks rather than simply lowering costs for new purchases generally.
  • Immediate effective date language (sales on or after the date of introduction) may create transition or administrative issues for dealers, buyers, and tax administrators; the bill does not explain how to manage that transition.