Higher tax could hurt transportation industry

Business owners often run into unexpected or new expenses, especially those in the transportation industry. While it's possible for some transportation companies to limit their overall costs by employing routing software, the trend of implementing such technology may continue to grow, especially with some people calling for increases in the federal excise tax (FET) on heavy-duty trucks and trailers.

Consequences associated with higher tax rates
Some politicians are opposed to any such increase and have introduced a bill that discourages the call to increase the tax, which is already at 12 percent. The resolution's advocates say the current tax can already discourage fleet owners from investing in new vehicles and growing their business - a factor that may contribute to the industry as a whole slowing down. It could also keep companies from purchasing new, greener vehicles, something that could contribute to increased pollution.

If the legislation passes, it will not prohibit the FET from being raised in the future. Lawmakers hope its potential success will send a message to the Senate and White House, forcing them to consider keeping this tax low as they think about reforming the American tax system.

Opposition to increases remain strong
Industry groups and professionals have voiced support for the bill and called for Congress to shoot down any proposed increases to the FET. Many claim a jump would hurt both American companies and their employees.

"The existing 12 percent levy on heavy duty trucks is already the highest excise tax imposed by Congress on a percentage basis," said Dick Witcher, chairman of the American Truck Dealers (ATD). "The FET adds thousands of dollars to a commercial truck that already costs well over $100,000. With a highway bill and comprehensive tax reform on the agenda in Washington, House Concurrent Resolution 52 sends a clear message to Congress that hiking the FET on commercial trucks should not be on the table."

Because the bill's passage cannot guarantee rates won't be raised in the coming months, fleet owners need to be prepared to handle a hike in tax costs. By getting ready for potential tax hikes for the future with logistic software that lowers fuel spend, companies can alleviate any financial pressure they may feel in this situation.