Modern, Clean, and Safe Trucks Act: Trucking Industry Gets Relief as 12% Federal Excise Tax is Repealed

The Modern, Clean, and Safe Trucks Act of 2025 is taking aim at the highest percentage Federal excise tax on the books—the 12% tax currently slapped on new heavy trucks, tractors, and trailers. This tax, which dates back to 1917, adds serious cash to the sticker price: we’re talking $7,000 or more for a new trailer and up to $50,000 for the newest, most advanced trucks. The bill’s core action, laid out in Section 3, is the complete removal of this tax (Subchapter C of Chapter 31 of the Internal Revenue Code) for all sales or installations happening on or after the date the Act was introduced.

Why Get Rid of a Century-Old Tax?

Congress’s findings (Section 2) are pretty straightforward: the tax is acting like a brake pedal on modernization. When a new clean diesel truck already costs an extra $20,000 just because of this tax, fleet owners are incentivized to keep their old rigs running. The data shows this is happening—almost half of the big Class 8 trucks on the road are over a decade old. This matters because a modern truck is vastly cleaner and safer than its 1990s counterpart; 60 new trucks today put out the same pollution as just one truck made in 1988.

The Real-World Impact: Cleaner Air and Cheaper Shipping

For anyone who breathes air or buys things (so, everyone), this repeal could be a win. By removing the 12% barrier, the bill encourages trucking companies to upgrade their fleets faster. Think about the local logistics company that needs to replace five aging trucks that constantly break down and guzzle fuel. Saving $100,000 or more on the upfront cost of five new vehicles makes the upgrade decision much easier. Newer trucks save about 2,200 gallons of fuel annually compared to older models, which translates to lower operating costs for the carrier and, potentially, less upward pressure on shipping costs for retailers and consumers.

This isn't just about diesel, either. The bill notes that this tax is currently hurting the adoption of electric and alternative-fueled trucks, which already have a higher initial cost. Repealing the tax helps level the playing field, speeding up the transition to zero-emission vehicles and cutting down on transportation pollution in major cities and along busy corridors.

The Fine Print and the Funding Question

Section 3 also includes technical clean-up, making sure the tax code makes sense without the old excise tax. For instance, it clarifies the definition of tires that are still subject to certain rules, specifically excluding tires used on “mobile machinery” like construction or farming equipment that isn't primarily for road hauling. This ensures that a farmer buying a new combine isn't accidentally caught up in highway vehicle definitions.

However, there is one big question mark. The revenue from this 12% tax currently flows into the Highway Trust Fund, which pays for infrastructure projects. While the bill’s findings point out that this revenue stream is wildly variable, it is still a revenue stream. By eliminating it, Congress acknowledges they need to find a “steadier way to fund the Trust Fund.” While the immediate benefit is lower truck costs and cleaner air, the long-term challenge is figuring out how to replace that lost funding without hitting taxpayers or the industry with a new, equally painful fee down the road.