Research documents realities of a National Vehicle Miles Traveled Tax

From the American Transportation Research Institute.

The American Transportation Research Institute today released a new report detailing the costs of deploying and operating a national vehicle miles traveled (VMT) tax. This study was identified as a top research priority by ATRI’s Research Advisory Committee in 2020.

With a goal of understanding the opportunities and challenges of a federal system, the research first explored the technical and administrative requirements of charging every U.S. driver for miles driven. Next the costs of operating a VMT tax program were calculated, including those associated with technology, data communications and account management.

It was found that replacing the federal fuel tax with a VMT tax that is assessed on 272 million private vehicles could result in collection costs of more than $20 billion annually – or 300 times higher than the federal fuel tax. The central reason for this large increase in costs is the shift in collection points – from a couple hundred fuel terminal operators to every registered motor vehicle in the U.S.

“It’s clear that a VMT tax is a far more complicated and costly replacement for the fuel tax than many had anticipated,” said James Burg Trucking Company President and CEO Jim Burg. “If a system like this is going to work for everyone, many years of thoughtful planning and federal leadership are needed.”

Additionally, the report found that hardware costs alone would have an initial price tag of $13.6 billion and require ongoing replacement, telecommunications costs would be approximately $13 billion annually, and account administration would be an additional $4.3 billion each year. On top of these costs, credit card transactions for electronic payment and even the shipping costs for the hardware could each cost more than $1 billion.

“With policymakers preparing to lay out a vision for the future of America’s infrastructure, ATRI’s analysis could not come at a more critical time,” said ATA President and CEO Chris Spear. “Most experts agree that some sort of VMT system is a part of that future, and ATRI’s report makes clear that implementing it will take thoughtful leadership, cooperation from stakeholders and a strong plan to transition away from current funding streams.”

2021 TAM Priorities

The Trucking Association of Massachusetts has a variety of goals and priorities for 2021.

 

Protecting Trucking Companies in Massachusetts

TAM will continue to support legislation and create initiatives that ensure Massachusetts residents are served effectively, and to foster a better business environment in our state for Trucking.

  • Advocate for legislation that provides safer and cleaner vehicles
  • Promote awareness of the unforeseen impacts of the Transportation Climate Initiative to our economy and jobs
  • Advocate for better understanding regarding current tax laws that put all MA trucking companies at a disadvantage and exacerbates the ongoing exodus of trucking companies and jobs in Massachusetts

Workforce Development

TAM will continue to identify resources and develop innovative campaigns to help develop the trucking industry in our State.  Our State currently has many deterrents for Trucking companies to domicile in Mass which has led to a decline in jobs while other states have seen increased opportunities.

Best in Class Regulatory Support

The regulatory environment in Massachusetts for trucking is complex, far-reaching, and intense. TAM will continue to be relentless in its efforts to support Its members in their ongoing regulatory and compliance efforts.

Lawsuit Abuse

Abusive crash lawsuits threaten our supply chain, leading to empty grocery store shelves, more expensive goods and elimination of jobs.  Additionally, this litigious environment is creating major disruptions in the excess insurance market forcing trucking companies across the state and nation to close their doors.

Telling our Story

Trucking is one of the most under-appreciated industries in the country. Because the industry is so good at what it does, the average person doesn’t give a second thought to how products get to shelves or how vaccines get into arms. We have a great story to tell, and TAM will continue to be passionate in reminding everyone about the value of what we do.

RMV implements further federal credential extensions through May

The Massachusetts Registry of Motor Vehicles (RMV) has implemented further Federal Motor Carrier Safety Administration (FMCSA) extensions to the renewal timelines for expiring Commercial Driver’s Licenses (CDLs), Commercial Learner’s Permits (CLPs), and CDL Medical Certificates.

This extension does not apply to any CDL or CPL holders whose privileges were suspended or revoked for traffic offenses, or to non-domiciled CDL or CLP holders whose lawful presence has expired.

Credential Extensions

  • All CDLs and CLPs that expire between March 1, 2020 and May 30, 2021 will remain valid until May 31, 2021
    • CLP holders do not need to retake the general or endorsement knowledge tests if their permits originally expired during this time and have been extended.

CDL Medical Certificates

  • Certificates that expire between December 1, 2020 and May 30, 2021 will expire on May 31, 2021.
  • Commercial drivers must self-certify prior to the expiration date listed above or their CDLs will be downgraded to Class D licenses.

CDL Road Tests

  • The RMV has also waived the 14-day road test waiting period until May 31, 2021.

These changes are part of the continuing effort by the RMV to minimize in-person interaction between customers, RMV Service Center staff, and associated business partners.

Note

  • This is the last extension implemented by the RMV unless declared by the FMCSA.
  • The RMV is sending emails next week to commercial drivers informing them of the most recent extensions.

FMCSA extends Medical Exam waivers again

FMCSA issued another extension to the previous CDL/CLP and Medical Examination waivers that were set to expire the end of this month. This waiver becomes effective on March 1, 2021 and expires on May 31, 2021. Please read the specific provisions below, as the dates and applicability vary. As with the previous extensions, state drivers licensing agencies (SDLAs) have the authority to exercise discretion in extending these dates, consistent with the outline below. Carriers and drivers should check with the SDLA to confirm their state’s expiration periods.

For CDL/CLP Drivers, the waiver will:

  • Waive until May 31, 2021, the maximum period of CDL validity for CDLs due for renewal on or after March 1, 2020;
  • Waive until May 31, 2021, the maximum period of CLP validity for CLPs that are due for renewal on or after March 1, 2020, without requiring the CLP holders to retake the general and endorsement knowledge tests;
  • Waive until May 31, 2021, the requirement that CLP holders wait 14 days to take the CDL skills test;

Medical Requirements for CDL/CLP and non-CDL drivers:

  • This notice will waive, until May 31, 2021, the requirement that CDL holders, CLP holders, and non-CDL drivers have a medical examination and certification, provided that they have proof of a valid medical certification and any required medical variance that were issued for a period of 90 days or longer and that expired on or after December 1, 2020.
  • This notice will also waive, until May 31, 2021, the requirement that, in order to maintain the medical certification status of “certified,” CDL or CLP holders provide the SDLA with an original or copy of a subsequently issued medical examiner’s certificate and any required medical variance, provided that they have proof of a valid medical certification or medical variance that expired on or after December 1, 2020.

For State Driver License Agencies (SDLA):

  • This notice waives, until May 31, 2021, the requirement that the SDLA change the CDL or CLP holder’s medical certification status to “not certified” upon the expiration of the medical examiner’s certificate or medical variance, provided that they have proof of a valid medical certification or medical variance that expired on or after December 1, 2020. Additionally, the notice waives certain requirements with regards to SDLAs downgrading a driver’s CDL or CLP upon expiration of the medical examiner’s certificate or medical variance, provided the SDLAs have proof of a valid medical certification or medical variance that expired on or after December 1, 2020.

NOTE—in the notice, FMCSA reiterates that the extension “permits, but does not require” states to extend the validity periods and processes referenced above. This ultimately means that a SDLA may choose not to extend the validity periods, based on the operational status within their state. The full waiver notice can be found here. Carriers and drivers should review this waiver, and confirm with the SDLA, to ensure all terms, conditions, and restrictions are met.

Additionally, FMCSA also announced extension of waivers related to CLP holders operating with a CDL driver in the front seat, out of state CDL applicant testing, and third-party knowledge testing.

Trucking at the heart of the economy

While not always front and center, it may well be impossible to overstate just how central trucking is to the American economy and to American life. While Americans often think of the nation as a country of farms and factories, as much as anything we are a country of roads.

And on those roads are millions of trucks – driven by 3.6 million professional drivers as part of an industry that employs nearly 8 million people. That industry, trucking, is the lifeblood of our economy. Powering economic growth, raising our quality of life and now, during these unprecedented times, just making life possible.

In 29 other states, trucking is the top job, but in Massachusetts, the industry employs 129,360 – making it one our state’s most common jobs. But beyond the jobs our industry creates, our industry is a lifeline for communities across our state. Today in Massachusetts, 86.9% of cities and towns are solely dependent on trucks to deliver their food, fuel, clothing, and other goods. Trucks serve as that critical connection between our homes and our jobs and the rest of the world.

Nationwide, trucks move 11.84 billion tons of freight annually – accounting for 72.5% of all freight hauled in the U.S. And as an industry, trucking had gross revenues of nearly $792 billion according to the most recent data. This would conjure images of an industry of giant companies, but trucking is a small business industry. In 2020, 91.3% of trucking companies operated six or fewer trucks; and 97.4% of fleets had 20 trucks or less. There are certainly several large and successful trucking companies that are household names, but there are many, many more smaller companies doing their part to keep America moving.

All of these companies, regardless of size, share several common values including a dedication to doing their job efficiently, but more importantly, safely. As an industry, trucking spends more than $10 billion a year in technology and training that go above and beyond what federal regulations require. The highways are our offices, and we want them to be safe for everyone.

Trucking provides jobs for men and women across the country, and those jobs deliver the quality of life Americans expect from our economy. It is an industry dedicated to service, safely connecting our factories to ports, our farms to our supermarkets and our warehouses to our front porches, keeping America moving through all manner of challenges.

America’s truckers are an important line of defense against human trafficking

On any given day, there are tens of thousands of people being trafficked into and within the United States. A large percentage of these victims are minors, often young females, who are brutally forced to preform commercial acts of sex or labor against their will.

It is crucial to raise awareness for a crime that far too often goes undetected, and the trucking industry has stepped up.  Professional truck drivers are the eyes and ears of America’s roadways, playing a vital role in ending modern-day slavery. Over the past decade, America’s trucking industry has placed itself on the frontlines of this important fight, and has made meaningful contributions in the comprehensive effort to identify the victims and perpetrators of this heinous act.

The Trucking Association of Massachusetts (TAM), along with the American Trucking Associations, are partners with Truckers Against Trafficking, a nonprofit organization that trains professional truck drivers on best practices in recognizing and reporting the red flags of human trafficking.

Due in large part to its partnership with this important organization, our industry has served as an effective and powerful ally and asset to law enforcement who seek to identify and prosecute these crimes. To date, at least 708 likely human trafficking cases have been generated by truck drivers who witnessed suspicious activity and reported it. Truck drivers have identified 1,296 human trafficking victims, and made nearly 2,700 calls to the national hotline after noticing questionable activity while out in the field.

Because of the oppressive nature of human trafficking, perpetrators often commit their crimes during broad daylight, out in the open and undetected by the general public. It is necessary that our communities are able to recognize the subtle signs of the crime and know how to report it. America is fortunate that truck drivers, the professionals who spend the most time on the road, are so committed to this cause, helping law enforcement catch these criminals, and saving the lives of innocent people.

The American public must remain vigilant and committed year-round to battling the human trafficking crisis that plagues our communities and destroys lives. Despite the trucking industry making outstanding strides this last decade, there is a limit to how far individual drivers can carry this progress on their own. We need all Americans to join the fight.

Warning signs that all people should be aware of include an individual not having knowledge of their whereabouts or control of their identifications; restricted and controlled communications or not being allowed to speak for himself or herself; CB radio chatter about “commercial company” or flashing lights that signal a buyer location; signs of branding or tattooing of a trafficker’s name (often found on the victim’s neck); a van or RV that seems out of place or a vehicle dropping someone off and picking them up after 15 or 20 minutes.

All individuals who believe they have witnessed or are aware of human trafficking should call the National Human Trafficking hotline at 1-888-373-7888.

We urge you to join the trucking industry in the fight against human trafficking.  The victim you save could be somebody’s daughter, niece or nephew, or a next-door neighbor.

[Update] Massachusetts truck drivers and COVID vaccine

Updated Feb. 9 at 2 p.m. ET

While we were initially told Massachusetts truck drivers were included in Phase 2, Group 3, we have been informed this is not the case. At this time, truck drivers do not have any favorable status. The Massachusetts Department of Public Health has also informed us they will not be reviewing requests from any groups concerning vaccine availability until at least until April.

TAM will continue to monitor the situation and provide updates as they become available.

The original post from Feb. 1 is below.

[Original post starts here.] The Massachusetts Department of Public Health confirms Truck Drivers in Massachusetts will be in Phase 2, Group 3, Transit. They advise to monitor, When can I get the COVID-19 Vaccine? | Mass.gov webpage, for the latest information on the state’s COVID-19 vaccination plan. At this time, the Department of Public Health is not scheduling appointments directly.

Phase 2 will launch Feb. 1.

  • First group is now 75 and older
  • Second group is now 65+ or individuals of any age with two co-morbidities as outlined by the CDC. Please remember it is only the diagnosis that puts an individual “at increased risk” grouping, not the “may put at risk” grouping on the CDC website – Certain Medical Conditions and Risk for Severe COVID-19 Illness | CDC. Start date for this group is TBD and based on availability of vaccines.
  • The rest of the phases remains as two additional groups
    • Early education and K-12 workers, transit, utility, food and agriculture, sanitation, public works, and public health workers,
    • Individuals with one comorbidity.

Additional information will be forthcoming regarding groups within this phase, timing, vaccination access and clinics. Groups are placed sequentially within each Phase. You will also be able to check with your primary care provider or local pharmacy. Your primary care provider and local pharmacy may also have additional information at that time.

Phase 3, once the vaccine is available to the public, which is projected to be in April, vaccine clinics will be available on the CDC’s interactive website: vaccinefinder.org.

Please monitor COVID-19 Vaccine in Massachusetts | Mass.gov for updates to the COVID-19 Vaccine Plan.

UMassSafe launches survey concerning safety summits

Our friends at UMASS have received funding from the Federal Motor Carrier Safety Administration to conduct a commercial vehicle safety summit in 2022 or 2023. They are looking for your input on current, new or emerging technologies relevant to your work in preventing crashes involving large trucks and buses, as well as conference logistics, location, etc.

The University of Massachusetts Traffic Safety Program’s (UMassSafe) plan is to focus on advancing best practices for technologies that prevent large truck and bus crashes.

TAM encourages all commercial vehicle stakeholders to participate in the survey. To ensure the summit is relevant you the needs of attendees, please take a few minutes to complete the survey.

UMassSafe does excellent work, benefiting the trucking industry in the state. Thank you for participating.

Amazon testing AI cameras to monitor drivers

From The Independent.

Amazon is testing cameras equipped with artificial intelligence in order to monitor delivery drivers while they are working. The cameras will provide drivers real-time alerts to help them stay safe when they are on the road however many drivers apparently reported concerns to CNBC about the addition due to worries about corporate surveillance. …

The cameras record 100% of the time, Amazon says, with four lenses capturing the road, driver, and sides of the vehicle collecting 16 different safety features including speeding, hard-breaking, or distracted driving.

Read the full article at The Independent online.

TAM fact sheet on current rolling stock tax

Brief Summary

This legislation seeks to bring Massachusetts in line with a majority of other states within which an exemption from sales and use tax for rolling stock already exists. As drafted, the legislation amends Mass. Gen. Laws ch. 64H (i.e. sales tax) and Mass. Gen. Laws ch. 64I (i.e. use tax) to specifically exempt rolling stock from the sales and use tax. “Rolling stock” is defined as “vehicles such as trucks, tractors, and trailers that transport goods in interstate commerce.”

The legislation does not allow a motor carrier to avoid paying the multitude of fees otherwise required under federal, state and local law. Many other surrounding states (37) do not tax rolling stock; therefore, creating another incentive for interstate trucking companies to either leave Massachusetts or forego it in favor of other states. (i.e. potential companies in the future).

A recent study by Northeastern University’s Dukakis Center has shown that the elimination of the rolling stock tax will potentially produce an additional $15.9 million in additional taxes created by the growth of the for hire portion of the trucking industry. According to the same study, when factoring in private fleets as well, this benefit could double. This initiative will also incentivize trucking companies and companies with truck fleets to use newer, safer and more environmentally friendly trucks in the Commonwealth – whereas the current policy discourages this.

This legislation, which received a favorable report from the Joint Committee on Revenue last session, was included as part of the House Economic Development Bill during the same session.

Rationale

  • The Trucking Association of Massachusetts (TAM), which represents the Commonwealth trucking industry, has seen the trucking industry in Massachusetts decline as many trucking companies move to other states. Part of the reason that trucking companies have left the Commonwealth is due to the Commonwealth’s tax policies.
  • The Massachusetts Department of Revenue started collecting sales and use tax for rolling stock purchased in other states where those states have an exemption in place for rolling stock. The Commonwealth did not have a tax on rolling stock until 1996, but did not enforce the same until 2006.
  • This legislation will create a more attractive environment for trucking companies to remain in the Commonwealth. Trucking companies rely on constantly maintaining and upgrading their equipment. This means purchasing new rolling stock on a regular basis. If they know that their out-of-state purchases will incur an instate tax, the companies will work to reduce their nexus to the taxing state (i.e. Massachusetts).
  • By keeping trucking companies in the Commonwealth, the good jobs and competitive salaries that these companies offer will remain within the state. According to the United States Bureau of Labor Statistics, Massachusetts has the fifth highest annual mean wage for heavy and tractor-trailer drivers within the country. If more trucking companies find Massachusetts tax policy less favorable than neighboring states, the loss of Massachusetts trucking companies will become even more significant.
  • If the Commonwealth discourages trucking companies from domiciling in the state, transportation expenses will rise — further impacting the high cost of living already experienced in the Commonwealth. The costs associated with transporting goods are fairly straightforward. If the Commonwealth’s tax policies cause trucking companies to domicile elsewhere, the additional fuel, tolls and vehicle maintenance, among other costs, will be borne by Massachusetts residents and businesses.
  • This legislation is a matter of common sense. If a company does not purchase a product within State (A), it is not fair for State (A) to tax the company for purchasing a product in State (B). The purpose of taxes and fees is to support the mechanisms that help the taxpayer. (i.e. road and bridges, police, fire, etc.). In the case of the trucking industry, gas taxes, tolls, vehicle registrations and other license fees and taxes cover the expense of the trucking industry. Collecting sales and use tax on rolling stock purchased in other jurisdictions creates a disincentive for companies to expand in the Commonwealth. Given that states such as New Hampshire, which exempts rolling stock from sales and use tax, Massachusetts’ current tax policy will simply lead to higher costs for Massachusetts residents and businesses while driving economic opportunity to neighboring states. Various truck companies, who may be domiciled in Massachusetts or have repair facilities in Massachusetts, are now seeking to locate them outside of the state to reduce the substantial nexus necessary to collect such tax.
  • This legislation will create a more attractive environment for trucking companies to remain in the Commonwealth. By keeping trucking companies in the Commonwealth, the Commonwealth will keep the good jobs and salaries these companies offer within the state. Historically, states have exempted rolling stock from sales and use tax. If the Commonwealth discourages trucking companies from domiciling in the state, transportation expenses will rise further impacting the high cost of living already experienced in the Commonwealth.
  • From a public safety and environmental perspective, this legislation will ensure that trucking companies and companies with truck fleets will run their newer trucks in the Commonwealth. If a company knows that it will have to potentially pay a tax on new rolling stock used in the state, the company will not allow the rolling stock to have any nexus or connection to the Commonwealth. This means that older, less safe and more environmentally unfriendly trucks remain in the Commonwealth.
  • The Dukakis Center at Northeastern University was asked by the Trucking Association of Massachusetts to study the economic impact of the trucking in the Commonwealth. Key findings from the Dukakis Center study, released this Spring, included the following:
    • “The overall trucking industry (including private and for-hire tucking) represent about one in 12 jobs or about 300,000 jobs in Massachusetts in 2017.”
    • “Each local trucking employee on average generates $3,396 per year in state and local payroll, income and property taxes and each local truck on average generates $3,125 per year in taxes from support service activity.”
    • “Most states—37 out of 50—exempt for-hire interstate trucking firms from paying sales tax on new equipment purchases to encourage interstate trade by local firms. States with full exemptions include four New England states—Connecticut, Maine, New Hampshire, and Rhode Island— and a fifth, Vermont, with the tax capped at $1,850 per truck. Massachusetts is the only New England state with no sales tax exemptions for interstate for-hire trucking firms.”
    • “The following occupations illustrate how well these production jobs pay: 1) diesel engine mechanic (2017 US average income=$48,000 and MA=$57,550); 2) riggers (US=$50,270 and MA=$56,650); 3) machinist (US=$44,160 and MA=$51,020); and, 4) heavy and tractor-trailer truck drivers (US=$44,500 and MA=$50,580). Source: Bureau Labor Statistics (2017).”
    • “There are several problems with Massachusetts’ application of sales and use taxes applied to trucks (aka, taxing rolling stock). First, doctrinal inconsistency: most states apportion and promote local trucking activity; Massachusetts does the opposite. Second, taxing rolling stock and increasing the relative tax burden motivates relocation (the impact of state and local taxes on location is well established). Third, the benefits of efficient trucking are broad, but the costs are disproportionately borne by local trucking companies (in a competitive industry passing along these costs to customers is impossible). Last, taxing local companies at a higher rate yields slower local company growth.”
    • “Analysis of the number of for-hire trucking establishments in each state over time illustrates that states that apply sales tax on the purchase of trucks engaged in interstate carriage have significantly fewer firms. From this perspective, we presented a counterfactual consideration above: if Massachusetts for-hire trucking employment grew at the rate of the United States, 2,768 more employees and 2,076 more power units would be operating and generating an additional $15.9 million in tax revenue per year.”
    • “Hence, we find that if Massachusetts’ for-hire trucking industry grew at the same rate as the overall United States rate, we would have 2,768 more employees and 2,076 more power units would be operating. In total, an additional $9.4 million in payroll, income and property taxes, and $6.5 million in taxes related to purchase of support and ancillary services: hence, an additional $15.9 million per year. As Massachusetts private fleets are also subject to the same sales and use taxes, we assume the impact will be similar; hence, total tax implication can twice as much when including supermarket, manufacturing and other private fleets.” (emphasis added).