The trucking industry is essential to America’s economy. Over 70% of freight goods transported in the United States are moved on trucks and we move 10.5 billion tons of freight every year. This requires more than 3.4 million Class 8 trucks, about 3.5 million truck drivers, and more than 38 billion gallons of diesel fuel. To put it simply—without trucks, America’s economy would stall.
How Fuel Taxes Work
Truckers pay fuel taxes according to IFTA, or the International Fuel Tax Agreement, which works on a “pay now or pay later” system. The collection and distribution of fuel taxes are done by the International Fuel Tax Association and the process they use to determine the taxes owed to each state is a simple one:
- As commercial trucks buy fuel in each state the tax is applied to the licensee’s (truckers) account.
- At the end of the fiscal quarter truckers must complete a full tax report of all the miles they traveled and gallons on fuel they purchased.
- The average fuel mileage is then used to calculate the tax liability to each state.
However, as efficient as the system makes calculating taxes, there is nothing simple about the price of fuel taxes.
The Burden Placed on Truckers
Fuel tax averages on both the state and federal level have risen in the past year, placing a strain truckers. Many truckers you see are independent contractors who own/lease their truck and are responsible for taxes and maintenance on it. With local diesel prices hovering around $4 truck drivers are spending north of $1,000 to fill up their tanks, not including the taxes that they pay on that fuel. As of 2016 fuel taxes were:
- $0.244 per gallon as an average federal tax
- $0.273 per gallon as an average state tax
Truckers gross, on average, $40,000 annually. They must pay, on average, $6,000 in fuel taxes!
Taking a Stand
Working towards a solution needs to be our priority. Unfortunately, legislators are dismissive of giving any type of fuel tax break for diesel or gasoline taxes. John McCain proposed a federal gasoline tax holiday for truckers that was immediately dismissed by legislators immediately. More voices need to speak up on behalf of the people that work hard to transport 70% of our goods across the country. We need to take care of the truckers that are so vital to our economy by easing their tax burden and making the long hours they spend on the road rewarding.
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