Massachusetts Truck Taxes Need Revamp Beyond Adding an Exemption

Contributing sentiments towards policy:

63% : States retaining rolling-stock taxes should work toward a uniform mileage-based approach, ideally through a model rule developed by the Multistate Tax Commission or another interstate consortium.
61% : Andrew Leahey is an assistant professor of law at Drexel Kline School of Law, where he teaches classes on tax, technology, and regulation.
59% : " The net result is that when Massachusetts imposes its sales tax again down the transaction chain, when many of those transported goods are sold at retail, the state is taxing a price that has a sales tax already embedded.
57% : Massachusetts is also imposing a sales and use tax on a business input.
56% : The current system gets tax and environmental policy backward.
56% : Massachusetts itself uses apportionment elsewhere in its tax code -- yet when the asset happens to have 18 wheels and an airhorn, limited in-state use can produce tax exposure untethered to the share of the truck's activity occurring there.
55% : Spend a week in the state, and the tax can apply based on the truck's full purchase price.
55% : This is called tax pyramiding; we know it as "higher prices.
54% : Yet Massachusetts doesn't apportion its rolling-stock tax according to how much the truck is used in the commonwealth.
54% : A retail sales tax is intended to be levied at final consumption.
54% : To call any change a trucking-industry "tax break" would miss the point.
53% : The sales and use tax on interstate rolling stock can apply to the full purchase price of a truck even when only a small share of that vehicle's miles are logged by drivers in the state.
52% : If lawmakers retain a tax on rolling stock, newer vehicles meeting higher emissions standards should receive a credit or other adjustment.
50% : This means any levy based on a purchase price will impose a larger burden on newer equipment.
48% : Some of it is embedded in freight costs and reflected in the prices of goods such as groceries (themselves exempt from sales and use taxes otherwise), medicine, construction materials, and other transported items.
48% : Under state guidelines, a vehicle generally escapes the tax only if it is used or stored in the state for no more than six days during a 12-month period.
48% : But sometimes it's cheaper to stop taxing the behavior policymakers say they want -- and ensure a base level of homogeneity between state actions such as the tax code and environmental policy.
47% : The policy produces two distortions for the price of one: It makes cleaner capital investment more expensive and pushes an upstream tax into the downstream cost of consumption.
47% : Common definitions of rolling stock, mileage apportionment algorithms, reciprocal credits, thresholds, and documentation requirements would prevent carriers from confronting a different tax regime every time they roll across state lines.
46% : The state should also ensure that fleet modernization doesn't increase a carrier's tax penalty.
45% : Taxing the inputs along the way causes those taxes to become embedded in the cost of production before the final product even makes it to a store shelf.
44% : Massachusetts has been living with an unusual tax policy in the era of climate change, taxing cleaner trucks more than less efficient ones and indirectly sending part of the bill for the difference to consumers.
44% : The problem originates with how Massachusetts determines what it gets to tax.
44% : Removing the distortion is environmental policy, even if it may seem like a tax break for heavy trucking.
42% : A consumption tax is a poor fit because it doesn't remain confined to trucking companies.
41% : A conventional environmental tax would attempt to make pollution more expensive so businesses have an incentive to reduce it.
34% : Instead, it should apportion the tax according to in-state mileage while ensuring that replacing older equipment never results in a larger tax levy for trucking companies.
10% : Massachusetts' tax on interstate trucks functions as a reverse carbon tax and a hidden tax on consumers -- and policymakers now have a chance to fix it.

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