A century after Congress imposed a temporary tax to help pay for America’s entry into World War I, the trucking industry is once again asking lawmakers to let it expire. On June 2, 2026, Sens. Todd Young (R-Ind.) and Angela Alsobrooks (D-Md.) introduced the Modern, Clean, and Safe Trucks Act of 2026, bipartisan legislation that would eliminate the 12% federal excise tax the FET levied on every new heavy-duty truck, tractor, semitrailer chassis and trailer sold in the United States. The bill has been read twice and referred to committee, the same procedural starting line where four previous repeal attempts have stalled. The opposition runs against the tax, not the repeal. Far from resisting the bill, the freight and equipment sectors are among its loudest champions. The American Trucking Associations, American Truck Dealers and the Zero Emission Transportation Association have all endorsed eliminating a levy they describe as outdated, punitive and counterproductive to the safety and environmental goals Washington claims to want.
“This tax hurts the small businesses and independent truckers that are the core of American trucking, and it promotes the usage of older, less-efficient trucks.” Sen. Todd Young
A tax built for 1917, still collecting in 2026
The federal excise tax on heavy trucks was first enacted in 1917 as an emergency revenue measure to finance the United States’ involvement in World War I. The war ended in 1918. The tax did not. More than a century later it survives as a 12% retail levy written into the Internal Revenue Code of 1986, applied at the point of first sale on Class 8 trucks, truck tractors, trailers and semitrailer chassis above defined weight thresholds.
Industry advocates are quick to point out a striking distinction: at 12%, the FET is the highest percentage rate of any federal ad valorem excise tax currently on the books. It outranks the federal levies on tobacco, alcohol and firearms as a share of a product’s price. According to the American Trucking Associations, it amounts to roughly a $6 billion annual burden on the trucking industry a figure that swings sharply from year to year because the tax is tied directly to new-vehicle sales volumes.
That structural quirk matters. Unlike the federal fuel taxes that supply the bulk of highway funding and roll in steadily with every gallon pumped, FET receipts rise and fall with the truck-buying cycle. In a strong sales year the Treasury collects briskly; in a downturn, when fleets defer purchases, the revenue contracts at exactly the moment infrastructure needs do not. The bill’s own findings flag this volatility as a reason the tax is a poor foundation for long-term infrastructure financing.
Tens of thousands of dollars per truck
Because the FET is calculated as a percentage of the sale price, its dollar weight scales with the cost of the equipment and modern trucks are not cheap. Senator Young’s office estimates the tax adds $15,000 to $30,000 to the price of a new heavy truck, trailer, semitrailer chassis or tractor. The congressional findings attached to the legislation break the impact down further: roughly $7,000 or more on a standard trailer, at least $20,000 on a new clean-diesel truck, and as much as $50,000 on an advanced zero-emission or alternative-fueled model.
American Truck Dealers Chairman Kevin Holmes, who is also president and CEO of Advantage Truck Group, framed the dealer’s-eye view bluntly. The FET, he said, is “outdated, inefficient and punitive to both dealers and fleets, routinely adding over $20,000 to the price of a new heavy-duty commercial motor vehicle.” For the family businesses and owner-operators who make up the overwhelming majority of the trucking sector, a five-figure surcharge applied up front, before the truck has hauled a single load, can be the difference between ordering new equipment and nursing an older rig through another year.
That last point the up-front timing of the tax is central to the industry’s case. Because the FET applies only to new vehicles and is collected at the moment of purchase, it lands hardest precisely when a carrier is trying to modernize. A fleet that keeps an aging truck running pays no FET at all. The tax therefore creates a financial incentive to delay replacement, the opposite of what safety and emissions policy would seem to favor.
An aging fleet, and a tax that helps keep it old
The consequences of that incentive show up in the makeup of the national fleet. By the bill sponsors’ accounting, nearly 34% of the Class 8 trucks operating on U.S. roads today were built before 2010 meaning roughly a third of the country’s heaviest trucks lack more than a decade of advances in fuel efficiency, emissions control and crash-avoidance technology. Every model year that a fleet defers a purchase to sidestep the FET is a model year of safety and efficiency improvements that stays parked on the dealer’s lot.
Supporters argue the math is self-defeating from a public-policy standpoint. The federal government spends considerable effort tightening emissions standards and promoting advanced safety systems such as automatic emergency braking and lane-departure warnings, yet a separate corner of the tax code makes the newest, cleanest, safest trucks the most expensive to buy. Repeal advocates frame the FET as a tax that quietly works against the rest of Washington’s trucking agenda.
For a small carrier, the practical effect is a kind of upgrade penalty. Consider an owner-operator weighing a new tractor against another season with a high-mileage truck nearing the end of its useful life. The newer unit promises better fuel economy, lower maintenance risk and the latest safety systems but the FET tacks five figures onto an already steep purchase price, lengthening the payback period and tightening the financing math. Multiply that calculus across thousands of small fleets, the industry argues, and the cumulative result is a national truck population that turns over more slowly than it otherwise would, leaving older, dirtier and less safe equipment in service longer than the underlying economics alone would dictate.
Why freight groups oppose the levy
The industry coalition behind repeal is broad and, notably, spans the diesel and zero-emission camps that often find themselves on opposite sides of trucking debates. The American Trucking Associations, the dealer-focused American Truck Dealers and the Zero Emission Transportation Association have jointly urged congressional leadership to scrap the tax, casting it as a shared obstacle rather than a partisan or technology-specific grievance.
ATA President and CEO Chris Spear tied the tax directly to the structure of the industry it falls on. “First implemented over a century ago to fund America’s involvement in World War I, the FET currently adds tens of thousands of dollars to the cost of all new heavy-duty trucks and trailers, regardless of whether they run on diesel, alternative fuels, or zero-emission powertrains,” Spear said. “Keeping this antiquated tax on the books imposes an enormous hardship particularly for the family businesses and independent truckers who make up the overwhelming majority of trucking.”
Spear also reached for an argument designed to resonate beyond the trucking lobby: domestic manufacturing. “Removing this burden will allow motor carriers to replace their trucks and trailers with modern, safer, and cleaner equipment, which will in turn provide a boost to U.S. manufacturing jobs,” he said. The logic is straightforward cheaper new trucks mean more orders, and more orders mean more work at the North American plants that build them and the supplier base that feeds them.
“The 12% Federal Excise Tax is outdated, inefficient and punitive to both dealers and fleets, routinely adding over $20,000 to the price of a new heavy-duty commercial motor vehicle.” Kevin Holmes, Chairman, American Truck Dealers
A bipartisan bill, and a House companion
The Senate measure pairs a Republican and a Democrat by design, and both sponsors leaned into the cross-aisle framing. Young called repeal “a simple step that can help the American trucking industry and consumers,” arguing that cutting the tax “will lead to newer, safer, and cleaner trucks on America’s roads.” Alsobrooks emphasized the bill’s alignment with environmental goals as well as small-business relief: “Our bill supports a modern trucking industry allowing for the adoption of newer trucks that are safer and more fuel-efficient. In doing so, the bill supports small businesses, independent truckers, and our environmental goals it just makes sense.”
The Senate bill does not stand alone. A House companion was introduced in 2025 by a bipartisan group of members, including Rep. Chris Pappas (D-N.H.), who has stressed the proposal’s potential to bolster supply chains while lowering costs for small businesses. “Cutting the federal excise tax on heavy-duty trucks and trailers will help America’s Main Street economy grow and strengthen our supply chains, while also supporting the adoption of newer, safer and cleaner trucks,” Pappas said. The two chambers’ bills give repeal advocates parallel vehicles to advance though, as in past cycles, companion bills do not guarantee floor action.
A familiar fight: four tries and counting
If the effort feels familiar, that is because it is. The Modern, Clean, and Safe Trucks Act has now been introduced in four consecutive Congresses the 116th (2019), the 117th (2022), the 118th (2023) and the 119th (the current session, with the Senate version arriving in 2026). Each prior attempt drew industry praise and bipartisan sponsorship; none reached the president’s desk.
The recurring failure is not, by most accounts, a matter of opposition to the policy itself. There is little organized constituency arguing that trucks ought to carry the highest excise-tax rate of any product in the country. The obstacle is more prosaic and more stubborn: money. Repealing the FET means finding roughly $6 billion a year in highway revenue somewhere else and that is where the politics get hard.
The clean-truck dimension
Supporters have increasingly framed repeal as climate and air-quality policy, not merely tax relief. The argument rests on the premise that newer trucks are dramatically cleaner than the ones they replace, so anything that speeds fleet turnover delivers an environmental dividend. The numbers cited by advocates are substantial: truck-manufacturing advances between 2007 and 2020 are credited with averting 202 million tons of carbon dioxide and 27 million tons of nitrogen oxide emissions, while conserving some 20 billion gallons of diesel fuel. On an individual basis, a single Class 8 truck running the latest clean-diesel configuration is estimated to save roughly 2,200 gallons of fuel a year compared with older models.
There is a particular irony that repeal advocates press hard on the zero-emission front. Because the FET is percentage-based, it falls heaviest on the most expensive trucks and battery-electric and other alternative-fueled models carry the highest sticker prices of all. A tax originally meant to raise wartime revenue now functions, in effect, as a surcharge on exactly the zero-emission equipment that federal and state climate programs are trying to put on the road. The Zero Emission Transportation Association’s presence in the repeal coalition underscores how the diesel and electric segments have found common cause here.
The real obstacle: the Highway Trust Fund
Whatever the merits of repeal, the FET does not exist in a vacuum. Its receipts flow into the Highway Trust Fund, the federal account that bankrolls road and bridge construction across the country. The trust fund draws the overwhelming majority of its revenue about 83%, or roughly $40 billion in 2022 from federal fuel taxes, with the remainder coming from a cluster of truck-related levies: the FET on heavy-vehicle sales, an excise tax on heavy-truck tires and an annual heavy-vehicle use tax.
The trust fund is already under strain. Federal fuel-tax rates have not been raised since 1993, inflation has eroded their real value, and improving fuel economy along with the gradual shift toward electric vehicles that pay no gas tax at all has steadily weakened the account’s revenue base. Analysts have warned that, absent new revenue or a transfer from the general fund, the Highway Trust Fund could face depletion before the end of the decade, with some projections pointing to 2028. Against that backdrop, removing a multibillion-dollar revenue stream is a heavy lift, however unpopular the underlying tax.
Critics of repeal generally infrastructure-funding advocates rather than defenders of the FET on its own terms make a simple point: the same tax that burdens truck buyers also helps pave the roads those trucks run on. Eliminate it without a replacement and the trust fund’s shortfall only widens. The legislation’s sponsors acknowledge the issue rather than dismiss it; the bill explicitly urges Congress to establish a more reliable and consistent alternative revenue mechanism to finance infrastructure, an implicit nod to the fact that repeal cannot responsibly happen in isolation.
What that replacement might be is its own thorny debate. Proposals range from raising or indexing the fuel tax to adopting a vehicle-miles-traveled (VMT) charge that would bill operators for actual road use, potentially adjusted by vehicle weight per axle. None of those options is politically easy, and the search for a durable highway-funding fix has frustrated lawmakers for years. There is also a budget-scoring wrinkle: when official estimators such as the Congressional Budget Office and the Joint Committee on Taxation evaluate excise-tax changes, they apply an offset recently around 21% to account for the way changes in excise collections ripple through income and payroll tax receipts. That accounting makes the headline revenue numbers, and the offsets needed to balance them, more complicated than a flat $6 billion swap.
Repeal does not fail because anyone loves the tax. It fails because nobody has agreed on what replaces the roughly $6 billion a year it sends to the Highway Trust Fund.
Cost pressure from every direction
The 2026 push arrives at a moment when truck buyers are already absorbing cost pressure from several directions at once. Holmes, the ATD chairman, situated the FET fight squarely within that broader environment: “As we face challenges from tariff volatility and the ever-changing regulatory landscape, it is critical to reassess burdensome tax policies like the FET.” For dealers and fleets, the FET is one line on an invoice that has been climbing for reasons ranging from emissions-compliance costs to materials prices to the duties levied on imported components and finished vehicles.
That layered cost picture is part of why the repeal coalition argues the timing is right. When equipment prices are stable, a 12% surcharge is painful; when prices are volatile and rising, the same percentage translates into an ever-larger absolute hit, because the tax is calculated on the higher base. A truck that costs more to build whether because of tariffs, regulation or commodity inflation automatically carries a bigger FET bill on top. In that sense, advocates contend, the tax compounds whatever other pressures are squeezing buyers, and removing it would offer relief that grows precisely as those other costs grow.
It is worth being precise about what the FET is and is not. It is a domestic federal excise tax on the retail sale of trucks, not a tariff or a trade measure, and it applies regardless of where a vehicle or its components originate. But it interacts with the trade environment in a meaningful way: tariffs and supply-chain costs raise the price of the equipment, and the percentage-based FET then takes its cut of that inflated price. For buyers, the distinction between a tariff and an excise tax is academic both show up as a higher number at the bottom of the purchase order.
What happens next
For now, the Modern, Clean, and Safe Trucks Act sits in committee in both chambers, awaiting the hearings and markups that would be needed to move it forward. Its bipartisan sponsorship and unusually unified industry backing give it credibility, and the framing around safety, emissions and small-business relief is calibrated to appeal across the aisle. But the legislative history is sobering: four prior attempts, four times stalled, with the Highway Trust Fund’s fragile finances looming over each.
The likeliest path to enactment, observers suggest, is not as a standalone bill but as a component of a larger highway or tax package a vehicle big enough to carry both the repeal and the offsetting revenue solution that has always been its missing piece. A surface-transportation reauthorization, in particular, would force Congress to confront the trust fund’s shortfall directly, and that is the kind of moment at which a long-sought repeal can finally find a home. Whether the 119th Congress produces such a vehicle remains to be seen.
What has changed least over the years is the underlying case the industry makes. A tax conceived to fund a war that ended in 1918 still adds tens of thousands of dollars to the cost of the safest, cleanest trucks available, nudges carriers to hold onto older equipment, and falls hardest on the small operators least able to absorb it. The arithmetic of repeal finding $6 billion a year somewhere else is what keeps the FET alive. Until Congress settles that question, the highest excise tax on any product in America looks likely to mark yet another anniversary on the books.