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

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.

The following communication was sent today to Sen. Elizabeth Warren (D-Mass.) clearly expressing the trucking industries opposition to a proposed federal truck-only vehicle miles traveled tax. The letter is also available as a PDF to be printed.

Dear Senator Warren,

On behalf of the Trucking Association on Massachusetts, I write to discuss our shared goal of pursuing meaningful investments in infrastructure in the weeks and months ahead. The trucking industry is eager to work with you, Congress and the Biden Administration to end the continuous cycle of underinvestment in our nation’s infrastructure. A bold investment in infrastructure will improve the safety and functionality of our nation’s transportation systems while reinvigorating a pandemic-stricken economy.

As that work begins in earnest, we want to convey our strongly-held view that any infrastructure investment must be grounded in long-term, sustainable funding, based on mechanisms where all road users contribute to rebuilding and revitalizing the American transportation network. The trucking industry will aid in those efforts, and welcomes the opportunity to contribute to infrastructure development in a meaningful and efficient way.

However, we strongly caution against discriminatory funding schemes that place the burden of supporting our infrastructure solely on the back of the trucking industry. Forcing the industry to cover the entire gap between available revenue and infrastructure funding needs will jeopardize economic stability, cripple our nation’s supply chain, and threaten to decimate recent economic gains. Moreover, it will irreparably fracture the broad stakeholder support that has facilitated the advancement of past highway bills. Therefore, any discriminatory funding schemes, like a truck-only vehicle miles traveled (VMT) tax, will be met with resolute opposition by the industry, and must be dismissed as a misguided and prejudiced funding gimmick.

Mandating that the trucking industry bear the brunt of our nation’s infrastructure investment via a truck-only VMT tax is unfair, imbalanced, and runs counter to public interest. In terms of feasibility, there are ample reasons why a truck-only VMT is an ill-conceived and dangerous solution. First, experts agree that proper implementation of a VMT tax will require at least five to ten years to generate revenue because the relevant technology has yet to be fully developed, large-scale field testing has not been conducted, data privacy and security issues have not been addressed, and VMT enforcement mechanisms have not been implemented to combat anticipated evasion. Second, current review of VMT fee pilot programs estimates that collection costs could be as high as 40 cents on the dollar. While full implementation will likely bring these costs down substantially, these estimates suggest collection costs could still be as high as 15%—more than 70 times greater than the cost to collect the fuel tax. Third, a VMT fee would require individual accounts for each taxed vehicle, which, if applied to all road users would affect approximately 270 million vehicles, creating a daunting administrative boondoggle to implement and oversee. Fourth, there is an assumption that electronic logging devices (ELDs), which are currently required in only 28% of commercial motor vehicles, can be used to track miles for the purpose of imposing a VMT fee. However, federal law prohibits government agencies from using ELDs for any purpose other than Hours of Service compliance.

The trucking industry stands ready and eager to work hand-in-glove with Congress and the White House towards stemming our deepening infrastructure crisis. As you and your colleagues work to advance meaningful infrastructure legislation, we urge you to consider funding mechanisms that are built around a system where all who benefit from the transportation system contribute fairly. And, we emphatically caution you against the pursuit of discriminatory funding mechanisms such as a truck-only VMT, which will seriously impede efforts to enact meaningful infrastructure legislation this Congress.

Thank you for your attention and thoughtful consideration of this important and timely matter.

Sincerely,

Kevin Weeks
Executive Director, Trucking Association of Massachusetts

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.

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).

The Massachusetts Department of Revenue (DOR) secured a change in the tax law in the mid-1990s and is only now enforcing it. The change? The ability to tax rolling stock if a company has a “substantial nexus” to the state!

While 37 states exempt the sales and use tax on rolling stock, Massachusetts now applies this tax to newly purchased trucks because of this law and a company’s “substantial nexus” to the state.

Under Massachusetts law, a “substantial nexus” or “tax jurisdiction” can be established when a company:

• is headquartered or commercially domiciled in the state
• owns real or tangible personal property in the state, including property that is possessed, held or used by another person pursuant to a lease, license, consignment or other arrangement;
• uses real or tangible personal property that it does not own in the state, including property that it possesses or holds pursuant to a lease, license, consignment or other arrangement;
• has a full or part-time employee acting on its behalf in the state, irrespective of the nature of the employment, see 830 CMR 63.39.1(3)(c)
• has an independent contractor or other non-employee representative acting or operating on its behalf in the state for the purpose of selling, delivering, installing, assembling, maintaining or repairing the corporation’s products, or taking orders for or otherwise establishing or maintaining a market for the corporation’s products and/or services in the state, see 830 CMR 63.39.1(3)(c);
• does not have the contacts or other incidents with the state as referenced in 830 CMR 63.39.1(3)(b)1. through 7., but has considerable in-state sales derived through either economic or virtual contacts.  See 830 CMR 63.39.1(3)(d). See also South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018).

If the DOR reviews your company, it can seek tax on any rolling stock you’ve purchased for the past three to six years.

For example, consider the following: Your company has a terminal, customer service center or headquarters in Massachusetts. You’ve purchased six tractors every year in New Hampshire for five years. Sales tax, if the vehicles were purchased in Massachusetts, might be approximately $8,500 each (i.e. $135,000 x 6.25%). Each year, you send the six trucks to your Massachusetts terminal to be upfitted according to your company’s standards, but they are otherwise used outside of the state. The DOR, because of your substantial nexus to the state and the vehicles’ entry into the state, could try to collect over $250,000 plus penalties for six years’ worth of unpaid taxes. (5 years x $51,000 in taxes owed (i.e. 6 tractors x $8,500)). In reality, certain trucking companies have already been assessed back taxes and penalties exceeding millions of dollars and penalties under similar scenarios.

TAM is currently working with elected officials to remove this rolling stock tax from law. Last legislative session, the Massachusetts House of Representatives passed this exemption.

A study by the Dukakis Center at Northeastern University showed that eliminating the rolling stock tax in Massachusetts will provide for future growth of the trucking industry, improve public safety and produce public safety benefits.

TAM has been working with other organizations, including statewide business, environmental, and public safety groups to reverse this law.

Removing the rolling stock tax from Massachusetts law is just one of many initiatives that TAM works on for the Massachusetts trucking industry.