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Legislators Introduce 5% Tax Credit on Purchase of 2007 Class 7-8 Trucks

June 28, 2005

WASHINGTON, D.C. — Three senators introduced legislation last week that would not only give fleets a 5 percent tax credit on the purchase of 2007-model Class 7 and 8 trucks equipped with cleaner-burning diesel engines, but would allow for expensing the full purchase price of those vehicles on a single year’s tax returns. Senator Gordon Smith (R-OR) introduced the incentives bill June 14 to “ensure the widest possible distribution of this clean diesel technology into the U.S. trucking fleet.” The bill from Senator Smith and co-sponsors Senators Blanche Lincoln (D-AK) and Lamar Alexander (R-TN) offers incentives for trucking companies to purchase new 2007-model trucks with their lower-emission engines in the first year they are to be made. Prior to the last major upgrade in diesel engine emission standards, a rash of pre-buys of the older engines created a run on the pre-upgrade engines, and slow sales of the newer, cleaner engines. Industry sources at the time cited concerns about durability and fuel economy of the newer engines. Legislation like this could head off such a trend this time. The bill says that companies would “be allowed an investment tax credit equal to 5 percent of the cost of EPA-compliant diesel equipment” purchased in 2007, and that carriers would also be allowed to “expense the acquisition cost of qualifying equipment acquired and placed into service” during that year.
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