What This Bill Does
This bill removes a 12 percent federal tax on the sale of new heavy trucks, tractors and trailers. The bill changes the Internal Revenue Code of 1986 to eliminate this tax and makes related changes to tax rules that reference this tax.
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Who It Affects
People and companies that manufacture, sell or buy new heavy trucks, tractors and trailers. The bill also impacts businesses in the trucking industry and suppliers.
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Key Provisions
* Eliminates the 12 percent federal tax on new heavy trucks, tractors and trailers (Sec. 3(a))
* Removes references to this tax from other parts of the tax code (Sec. 3(b))
* Changes rules about tires used on highway vehicles to clarify what qualifies as mobile machinery that does not owe the tax (Sec. 3(b)(1))
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What Changes
If this bill becomes law, buyers of new heavy trucks, tractors and trailers will no longer pay the 12 percent federal excise tax on these purchases. The bill text says this tax currently adds between $12,000 and $22,000 to the cost of a new vehicle.
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Important Definitions
The bill defines "mobile machinery" as a vehicle with equipment permanently mounted to it for construction, manufacturing, processing, farming, mining, drilling or timbering work where the equipment's operation is unrelated to transportation on public highways.
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Effective Date
The changes apply to sales and installations on or after the date this bill is introduced to Congress (Sec. 3(c)).
II
118TH CONGRESS
1ST SESSION
S. 694
To amend the Internal Revenue Code of 1986 to repeal the excise tax
on heavy trucks and trailers, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 8, 2023
Mr. YOUNG (for himself and Mr. CARDIN) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to repeal
the excise tax on heavy trucks and trailers, and for
other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Modern, Clean, and
4
Safe Trucks Act of 2023’’.
5
SEC. 2. FINDINGS.
6
Congress finds that—
7
(1) the 12-percent Federal retail excise tax on
8
certain new heavy trucks, tractors, and trailers, cou-
9
pled with new regulatory mandates, significantly in-
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•S 694 IS
creases the cost of new heavy-duty trucks, tractors,
1
and trailers and discourages the replacement of
2
older, less environmentally clean and less fuel eco-
3
nomical vehicles;
4
(2) this 12-percent Federal retail excise tax is
5
the highest percentage rate of any Federal ad valo-
6
rem excise tax;
7
(3) the Federal excise tax was first levied by
8
Congress in 1917 to help finance America’s involve-
9
ment in World War I;
10
(4) the 12-percent Federal retail excise tax rou-
11
tinely adds between $12,000 and $22,000 to the cost
12
of a new heavy truck, tractor, or trailer;
13
(5) nearly half of the Class 8 trucks on the
14
road are over 10 years old and lack a decade of envi-
15
ronmental and safety technological advancements;
16
(6) from 2007 to 2020, new trucks have re-
17
duced carbon dioxide emissions by 202,000,000 tons,
18
nitrogen oxide emissions by 27,000,000 tons, and
19
saved
20,000,000,000
gallons
of
diesel
and
20
472,000,000 barrels of crude oil;
21
(7) an owner of a single Class 8 truck powered
22
by the latest clean diesel engine can expect to save
23
about 2,200 gallons of fuel each year compared to
24
previous generations of technology;
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•S 694 IS
(8) since the late 1990s, cleaner fuel and ad-
1
vanced engines have combined to reduce nitrogen
2
oxide (NOx) emissions and particulate matter (PM)
3
emissions by 98 percent;
4
(9) the Federal excise tax disproportionately
5
impacts electric and alternative-fueled trucks, which
6
currently have a higher up front cost, at a time
7
when adoption of these technologies is needed to ac-
8
celerate the transition to zero emission vehicles and
9
the reduction of carbon pollution from transpor-
10
tation;
11
(10) In 2020, there were approximately
12
1,300,000 United States manufacturing, supplier,
13
dealership, and heavy-duty trucking and trailer re-
14
lated jobs;
15
(11) since the Federal retail excise tax on cer-
16
tain new heavy trucks, tractors, and trailers is based
17
on annual sales, receipts from the tax deposited in
18
the Highway Trust Fund can vary greatly;
19
(12) Congress should consider a more reliable
20
and consistent revenue mechanism to fund the High-
21
way Trust Fund;
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(13) Congress should advance the deployment
23
of the most modern, clean, and safe trucks through
24
eliminating the Federal excise tax on trucks; and
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•S 694 IS
(14) repealing the Federal excise tax would re-
1
sult in the replacement of older internal combustion
2
engine trucks with new heavy duty trucks that em-
3
ploy the latest safety and environmental tech-
4
nologies.
5
SEC. 3. REPEAL OF EXCISE TAX ON HEAVY TRUCKS AND
6
TRAILERS.
7
(a) IN GENERAL.—Chapter 31 of the Internal Rev-
8
enue Code of 1986 is amended by striking subchapter C
9
(and by striking the item relating to such subchapter from
10
the table of subchapters for such chapter).
11
(b) CONFORMING AMENDMENTS.—
12
(1) Section 4072(c) of such Code is amended to
13
read as follows:
14
‘‘(c) TIRES OF THE TYPE USED ON HIGHWAY VEHI-
15
CLES.—
16
‘‘(1) IN GENERAL.—For purposes of this part,
17
the term ‘tires of the type used on highway vehicles’
18
means tires of the type used on—
19
‘‘(A) motor vehicles which are highway ve-
20
hicles, or
21
‘‘(B) vehicles of the type used in connec-
22
tion with motor vehicles which are highway ve-
23
hicles.
24
‘‘(2) EXCEPTION FOR MOBILE MACHINERY.—
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•S 694 IS
‘‘(A) IN GENERAL.—Such term shall not
1
include tires of a type used exclusively on mo-
2
bile machinery.
3
‘‘(B) MOBILE MACHINERY.—For purposes
4
of subparagraph (A), the term ‘mobile machin-
5
ery’ means any vehicle which consists of a chas-
6
sis—
7
‘‘(i) to which there has been perma-
8
nently mounted (by welding, bolting, riv-
9
eting, or other means) machinery or equip-
10
ment to perform a construction, manufac-
11
turing, processing, farming, mining, drill-
12
ing, timbering, or similar operation if the
13
operation of the machinery or equipment is
14
unrelated to transportation on or off the
15
public highways,
16
‘‘(ii) which has been specially designed
17
to serve only as a mobile carriage and
18
mount (and a power source, where applica-
19
ble) for the particular machinery or equip-
20
ment involved, whether or not such ma-
21
chinery or equipment is in operation, and
22
‘‘(iii) which, by reason of such special
23
design, could not, without substantial
24
structural modification, be used as a com-
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•S 694 IS
ponent of a vehicle designed to perform a
1
function of transporting any load other
2
than that particular machinery or equip-
3
ment or similar machinery or equipment
4
requiring such a specially designed chas-
5
sis.’’.
6
(2) Section 4221 of such Code is amended—
7
(A) in subsection (a)—
8
(i) by striking ‘‘(or under subchapter
9
C of chapter 31 on the first retail sale)’’,
10
and
11
(ii) by striking ‘‘4051 or’’,
12
(B) in subsection (c), by striking ‘‘and in
13
the case of any article sold free of tax under
14
section 4053(6),’’, and
15
(C) in subsection (d)(1), by striking ‘‘,
16
and, in the case of the taxes imposed by sub-
17
chapter C of chapter 31, includes the retailer
18
with respect to the first retail sale’’.
19
(3) Section 4222(d) of such Code is amended
20
by striking ‘‘4053(6),’’.
21
(4) Section 4293 of such Code is amended by
22
striking ‘‘section 4051,’’.
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•S 694 IS
(5) Section 4483(g) of such Code is amended
1
by striking ‘‘section 4053(8)’’ and inserting ‘‘section
2
4072(c)(2)’’.
3
(6) Section 6416(b)(2) of such Code is amend-
4
ed by striking ‘‘or under section 4051’’.
5
(7) Section 6416(b) of such Code is amended
6
by striking paragraph (6).
7
(8) Section 9503(b)(1) of such Code is amend-
8
ed by striking subparagraph (B) and by redesig-
9
nating subparagraphs (C), (D), and (E) as subpara-
10
graphs (B), (C), and (D), respectively.
11
(c) EFFECTIVE DATE.—The amendments made by
12
this section shall apply to sales and installations on or
13
after the date of the introduction of this Act.
14
Æ
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