An organization representing small-business truckers voiced opposition toward a budget reconciliation package introduced in the House.
The budget packaged advanced in the House by a vote of 215-214 on Thursday, May 22. It now will advance to the Senate.
The Owner-Operator Independent Drivers Association opposes the bill’s trucking provisions in its current form. In a recent letter signed by OOIDA President Todd Spencer, the Association spoke out against a new $100 annual fee on small motor carriers as well as the continuation of a policy that prevents employee truck drivers from utilizing a per diem tax deduction.
“Not only does the legislation include a new and unnecessary tax on small trucking businesses, it makes permanent policies from the Tax Cuts and Jobs Act that increased employee drivers’ tax burden and unfairly denies them new tax relief provisions that benefit all other blue-collar workers,” OOIDA wrote.
New fees
On April 30, the House Transportation and Infrastructure Committee advanced its budget reconciliation proposal by a party-line vote of 36-30.
Much of the proposal was focused on providing stable revenue sources for the Highway Trust Fund, which currently uses fuel taxes to pay for highway and bridge projects. Because electric vehicles have not been contributing to the fund, the proposal calls for new annual fees of $250 for electric vehicles and $100 for hybrid vehicles.
Although OOIDA supports efforts to ensure that all road users pay their fair share into the Highway Trust Fund, the group opposes another provision that would impose a new $100 fee on small motor carriers.
The provision would create a new public website to display a motor carrier’s fitness to operate in interstate commerce and would be funded by a new annual $100 fee on anyone accessing the information, including small-business truckers. OOIDA argued that the information is already publicly available and that truckers shouldn’t be burdened any further.
“Our members already pay numerous federal taxes and fees, and as part of this reconciliation proves, we believe Congress should be eliminating unnecessary taxes, not creating new ones,” OOIDA wrote.
Per diem
The Association also told House leaders that it’s time to restore the per diem tax deduction for employee truck drivers.
Employee truck drivers had been allowed to deduct 80% of the per diem rate in expenses for meals while on the road from their taxes until the Tax Cuts and Jobs Act of 2017 eliminated the provision. The tax bill eliminated several miscellaneous deductions but increased the amount of a worker’s standard deduction. However, the math did not work out to the benefit of company truck drivers. Stu Hochfelder, an OOIDA member, told Land Line last year that with the per diem, he would be able to write off $20,000 per year in expenses.
“As part of reconciliation, Congress should be restoring employee drivers’ ability to deduct daily meal expenses while on the road, not permanently increasing their tax burden,” OOIDA wrote.
Overtime wages
During President Donald Trump’s campaign, he promised to eliminate taxes on overtime wages, saying, “the people who work overtime are among the hardest-working citizens in our country.”
However, OOIDA reminded House leaders that employee truck drivers do not receive overtime wages. The Fair Labor Standards Act of 1938 exempts motor carriers from having to pay truck drivers overtime.
“By failing to act and leaving this exemption in place, truckers will not benefit from the proposal to exempt overtime wages from taxes,” OOIDA wrote. “Even if a motor carrier currently pays their drivers overtime (despite not being required), these overtime wages would still be taxed if the reconciliation package were enacted. This means truckers will be denied a new tax benefit guaranteed to virtually every other every blue-collar worker in America.”
Bad deal for truckers
OOIDA told lawmakers that the current budget proposal fails to improve the truck driving profession.
“For American truckers, whether owner-operators or employee drivers, this bill surprisingly looks far from beautiful,” OOIDA wrote. “Not only has the House failed to include truckers’ top priorities, some of which we have been imploring legislators to remedy since 2017, but you have astonishingly included new taxes on our members. Regrettably, we are forced to oppose the legislation in its current form.” LL
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