Time for Tax Talks

Nov 12, 2024

Here's How Congress Can Support America's Essential Trucking Industry

With the election behind us, all eyes are now turning to the future leaders of the 119th Congress as they prepare to leverage their new majorities and put their stamp on landmark legislation. Topping next year's agenda will be tax reform since key provisions of the 2017 Tax Cuts and Jobs Act will expire by the end of 2025, and some are already beginning to phase out.

Congress has a historic opportunity to build on previous reforms and enact pro-growth policies that will strengthen our economy and create good-paying jobs. Priority #1 should be the trucking industry, which is the driving force of the nation's supply chains and sustains the jobs of 8.5 million Americans.

Trucks move 72 percent of all freight, and 80 percent of communities depend solely on trucks to receive their goods. Additionally, supporting the trucking workforce is vital for working families. The truck driver profession leads as a top-five occupation in 29 states.

As Members of Congress debate the extension and modernization of our tax code, the American Trucking Associations is urging them to advance provisions that support America's truckers, catalyze domestic manufacturing, improve highway safety, reduce emissions, and build new career pathways to the industry.

• Repeal the Federal Excise Tax (FET). There is bipartisan support for removing the 110-year-old tax that adds 12 percent to the cost of new heavy-duty trucks and trailers. This financial barrier disincentivizes America's trucking fleets-ranging in size from mom-and-pop companies and owner-operators to large enterprises-from purchasing and deploying American-manufactured vehicles equipped with the latest safety and emissions technologies that prevent accidents and make our air cleaner. Replacing older trucks would have an immediate impact on emissions since a newly manufactured truck produces half the CO2 of one from 2010.

• Expand flexibility of 529 plans. Truck drivers and diesel mechanics can build rewarding, good-paying careers in the industry. Empowering individuals to use their 529 accounts to pursue training and credentials to enter these skilled trades will undoubtably help balance an aging workforce and enable the industry to prepare for future growth.

• Extend and improve key provisions of the 2017 Tax Cuts and Jobs Act (TCJA). This legislation has significantly benefitted motor carriers by lowering rates, making the tax base fairer, and simplifying the tax code. As Congress considers extensions and improvements to ensure future economic growth, ATA strongly supports:

1. Maintaining or lowering both corporate and individual rates, and enable their permanence to reward entrepreneurs;

2. Making the 20 percent Qualified Business Income (QBI) tax deduction permanent for pass-through businesses to ensure they are not taxed disproportionately in comparison to C-Corp companies with which they compete;

3. Reinstating and extending the 100 percent bonus depreciation above the 179A caps to inspire greater investments in the newest, cleanest, safest equipment by trucking companies of all sizes; and

4. Making the current estate tax exemption permanent, expanding it, or altogether repealing this onerous penalty to better protect American family-owned, generational businesses that are the heart of the trucking industry and economy alike.

• Extend the Biodiesel Tax Credit and create parity for renewable fuels incentives. This will ensure that the benefits of purchasing and deploying clean fuels are realized by trucking companies of all sizes, reducing emissions nationwide without forcing the purchase or deployment of unproven technologies that do not yet fit the business models of all trucking fleets.

• Reinstate and modernize the Moving Expense Tax Deduction. This deduction is scheduled to reemerge from its suspension by January 1, 2026 and would once again provide significant benefits to individuals and families who must relocate for work. The economy has changed since 2017; therefore, reinstating and modernizing this deduction to adequately reflect hybrid and remote work models will benefit families and the overarching workforce.

• Create a tax incentive to recruit and retain new truck drivers. Addressing the driver shortage we face nationwide will require incentivizing individuals seeking fulfilling careers to obtain the credentials required to enter the trucking workforce.

• Establish a tax credit for tires re-treaded in the United States. Providing a $30 per tire tax credit for tires re-treaded in America would not only create countless manufacturing jobs, but also would ensure our nation's truckers have access to affordable, safe equipment rather than depending on unreliable, cheaply made, dangerous tires imported from adversary countries, namely China.

• Meet the needs of truck dealers by allowing for increased accounting flexibility. The COVID pandemic and subsequent supply chain crises exposed the trucking industry to equipment shortages. Providing tax relief flexibility and predictability to trucking supply chains will help fleets of all sizes keep putting newer, more efficient equipment on our nation's highways.

In the most recent election, voters spoke loud and clear that they want Congress to focus on improving the economy and reducing the harm caused by inflation. Congress can take action on these priorities by pursuing tax policies that remove roadblocks for the trucking industry and ultimately lower costs for truckers and consumers.