Other Taxes. Other Federal excise taxes on motor truck sales, tires, 

 parts, accessories and gasoline, general State sales taxes. State gasoline 

 taxes, tolls, special city and county taxes, etc.. are assumed to be in- 

 cluded under other cost items. 



Hi ehxvay-lJ ser Tax. Taxes are levied by States against truck operators 

 on the basis of mileage or value. However, these generally exclude oper- 

 ators of vehicles not for hire. Hence, since contract haulers would be 

 the only group of poultry assemblers materially affected, no cost has 

 been included for highway-user taxes in these analyses. 



Devrociatinn — Trucks. A standardized list of percentages of oriainal 

 cost, by years of age. was derived by using published "book values" for 

 trucks.'' These percentages decline progressively — from 25 percent in 

 the first vear to 3.2S percent between the 9th and 10th years. Appendix 

 Table T summarizes these rates. Depreciation rates established by refer- 

 ence to automotive industry pricing are presumed to reflect "normal" 

 wear depreciation and time depreciation. Vehicle age and aggregate 

 mileage were a«sumed to offset each other and "condition" was assumed 

 as standardized at trade-in time bv the repair and maintenance pro- 

 gram. New cost prices were established by 19S7-58 values quoted by 

 poultrv assembly firms in New England. 



Furthermore, it was assumed that trucks would be traded every 10 

 years or prior to a maior overhaul or engine renlacement. whichever 

 occurs first. For vehicles where chassis and bodv can be purchased 

 separately fin this study. 1-ton trucks and larger with nlatform bodies), 

 it was assumed the body would be traded half as frequently as the 

 chassis, or at least every 10 years. 



Interest — Trucks. Annual costs were determined according to the 

 formula:^ 



(r) fn + l) 



(P — S) 



(2) ( n ) 



where I represents annual cost. P the original investment, r the rate of 

 interest, n the years of expected use. and the S the salvage value at the 

 end of the useful life. Charges for chassis and bodv. with different 

 years of expected use. were separately determined and combined into 

 the total charge. 



Property Taxes — Triick'^. The "normal" denreciated values, described 

 under the section entitled "denrec'ation-trucks." were used a« a basis 

 for calculating the property tax. This was levied at the rate of 3 mills 

 per dollar of value for the particular number of years of age. with a 

 minimum charge of S4.50 per year per truck. 



Insurance — Trucks. Rates for trucks of various sizes were inter- 

 polated from information on field schedules. Considerable variation ex- 

 ists from State-to-State. and rates are also influenced by distance travel- 

 led and extent of coverage desired. Herein, modal values were used. 



^ Offirial Automobile Guide, Price Edition, Recording and Statistical Corporation. 

 87th Edition, Jan. 1958. 



® Clarke, D. A. Jr., and R. G. Bressler, Jr., op. cit., p. 14. 



48 



