Lawmakers unveil bill to boost natural gas truck sales

A bipartisan pair of lawmakers are seeking to level the playing field when it comes to how alternative fuel trucks are taxed, with the hope of getting more green vehicles on U.S. roads.

{mosads}Rep. Tim Ryan (D-Ohio) and Sen. Bill Cassidy (R-La.) unveiled legislation Wednesday that would partially exclude alternative fuel trucks from the excise tax imposed on heavy-duty trucks that are sold at retail.

There is currently a 12 percent federal excise tax imposed on the sale of heavy-duty trucks. Natural gas-fueled trucks have a much higher initial cost, or incremental cost, than conventional trucks because of their technology and limited quantities.

But the tax rate is assessed on both the base cost and incremental cost of the truck, which bill sponsors worry is putting an extra squeeze on alternative fuel trucks that is making them more expensive and hampering their widespread adoption.

“This month has been the hottest September in recorded history, and that has been the case for the past 11 months. Climate change is real, and we are seeing its effects firsthand,” Ryan said in a statement.

“Natural-gas fueled trucks will help reduce greenhouse gas emissions, decrease our dependence on foreign oil and move us eventually towards a future that runs on clean energy.”

The measure would reduce the tax rate by 35 percent for trucks that are powered by an alternative fuel, which includes natural gas, liquefied natural gas and renewable natural gas.

Bill sponsors say this would essentially ensure that the taxes paid on an alternative fuel truck are equivalent to the amount of taxes paid on a conventional truck.

Several states have opted to exempt portions of the vehicle cost from their own state taxes. In South Carolina, the rate was reduced by 30 percent, and in New Mexico, it was reduced by 18 percent.

“The Federal Excise Tax is making it more expensive for businesses that want to buy cleaner, safer, and more fuel efficient trucks that run on natural gas to do so,” Cassidy said.

“Reducing this burdensome tax on alternative fuel trucks, to match taxes on conventional trucks, will encourage the use and production of domestic natural gas—benefitting Louisiana’s economy and workers.”

A number of trucking and fuel companies applauded the legislation, saying in a press release that the bill would help remove a burden that can discourage alternative fuel truck use.

“For our customers that wish to enter into the natural gas truck market, this legislation will help facilitate the purchase of cleaner and more fuel efficient trucks by reducing the onerous tax burden caused by the FET,” said Jake Jacoby, president and chief executive officer of the Truck Renting and Leasing Association.