NGVAmerica has applauded Sen. Bill Cassidy, R-La., and Congressman Tim Ryan, D-Ohio, for introducing the Natural Gas Truck Tax Parity Act of 2016, legislation that provides natural gas and other alternative-fueled vehicles with a partial exclusion from the Federal Excise Tax (FET) imposed on heavy-duty trucks.
As the association notes, the proposal would accelerate the growth of environmentally friendly, clean-burning, heavy-duty natural gas trucks on America’s highways.
“This commonsense legislation would help level the playing field when it comes to the taxation of alternative-fueled trucks and remove another barrier to the greater utilization of clean-burning, low-cost, domestic natural gas in transportation,” said Matthew Godlewski, president of NGVAmerica. “NGVAmerica commends Senator Bill Cassidy and Congressman Tim Ryan for introducing legislation that would result in cleaner and greener trucks on America’s highways.”
The U.S. tax code currently imposes a 12% FET on the sale of all heavy-duty trucks, tractors and trailers, and this tax is the highest FET on a percentage basis on any product. According to NGVAmerica, there are strong arguments for eliminating the tax entirely. Because natural gas fuel systems add to the overall cost of a truck, the 12% FET creates an additional tax burden; an average of $7,000 per truck; and an unnecessary disincentive to those purchasing cleaner, safer and more fuel-efficient trucks.
If passed, this legislation would provide a permanent 35% exclusion from the 12% FET for alternative-fueled, heavy-duty trucks. This exclusion is designed to cover the additional incremental cost of heavy-duty natural gas trucks, ensuring the cleaner-burning trucks do not pay more in taxes than comparable diesel-powered trucks.
Some states – South Carolina and New Mexico – already recognize this inequity and exempt portions of the vehicle cost from state sales taxes. The proposal would extend this commonsense tax fix to the FET and would help put cleaner, alternative-fueled trucks on America’s roads.