Congress Moves to Close SUV Tax Loophole

[Khephra]

WASHINGTON (Reuters) - Congressional negotiators closed a controversial tax loophole on Wednesday that allowed small business owners to write-off the full cost of the biggest and most expensive sport utility vehicles.
The auto deduction is part of a long-standing tax provision covering depreciation of business expenses. It was originally intended for farmers and construction workers who need heavy duty vehicles to haul goods and materials.

Lawmakers expanded the popular write-off from $25,000 to $100,000 last year and lifted depreciation schedules to enable taxpayers to take the deduction all at once. This created a huge incentive for anyone running their own business to buy big SUVs, which have skyrocketed in popularity.

Tax fairness, environmental and consumer groups have complained that doctors, lawyers, accountants and other white collar professionals that run their own businesses have taken advantage of the loophole to buy the flashiest sport utilities for personal use. These luxury models can cost well over $50,000.

http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=6433292

[Carla in Ca]

1. Well, what a surprise

I guess breaking up the 9th Circuit Court of Appeals made them feel guilty.

[Judi Lynn]

2. You think this was a "Hail Mary" play from Bush?

Bushie to the rescue. He's leading the way to show Amurkans that he cares about the little people, too!

This may be the most obnoxious part of the article, among many other good candidates:

The critics also characterized the benefit an excessive tax break for the wealthy. The Bush administration urged Congress this week to shrink or eliminate the advantage, despite objections from some Republican lawmakers that doing so was tantamount to a tax increase.

[markus]

3. They need to do this retroactively

and make all these assholes pay for their own cars.

Hell, I think everybody on Fargo, ND has some sort of business, even if only on the side.

And I resent paying for all their goddmaned Lexii and Hummers.

[Mr E McSquare]

4. holy snikeys batman

I better buy that hummer before I actually have to pay for it.

[hatrack]

5. Plus the 2005s are hitting the lots

Better fan the fear that the big fat tax writeoff will go away, so as to clear the 04 models off the lot ASAP.

This is (and I'm racking my brain here) the only decent thing I've heard of Congress doing this year.

[trogdor]

It will never make the pResident's desk.

This is a election-year sham, just like the draft resolution yesterday. This bill isn't going anywhere, you can bank on it.

[hatrack]

9. You are, I suspect, entirely correct

They may as well call this the "Look Like We're Doing Something Act Of 2004". Never make it close to the White House.

[exJW]

6. Damn! And I was gonna use that this year!

I went to check on how the rules would apply to a 1 ton pickup and a Motorhome that I purchased, and found out that the rules allowed even your average 1/2 ton pickup.

The oddest thing was that the Volvo SUV was one of the vehicles allowed. The ruling applies to the weight of the car plus what the car is rated to carry, so a strong suspension plus a relatively heavy vehicle got you the tax break.

Funny how those details aren't common knowledge.

[Catfight]

7. Again, the 11th hour administration trying to make all their Wrong decision

right in the 11th hour. The 100k tax incentive should have gone to Hybrid cars and a tax penalty of $2000 for vehicles that get under 18 miles per gallon! Now that would make me happy. If Bush really didn't love people sucking up all the gas and Cheney didn't love Halliburton making loads of money off of people sucking up all the gas, there would have NEVER been this tax break on gas guzzlers!
Bush/Cheney are the oil lords of the West.

[DustMolecule]

10. I agree .... when the government starts essentially penalizing

energy 'abusers' (people/businesses that have no good reason to use that much of an available resource, in this case gasoline - accountants, doctors, etc. have, literally, "no business" driving those HUMONGOUS gas-hogs) and starts 'rewarding' people/businesses who make good energy choices (or attempt to make good choices), then we're moving in the right direction, imho.

[Hand]

8. Good idea for two reasons...

1) It's the right thing to do.

2) It'll cost Chimpy votes in Michigan!

:evilgrin:

[jmowreader]

11. The original intent was good

The loophole was designed to allow businesses to buy a truck, because new trucks can encourage job creation. Buying new trucks definitely gets old, shitty, gas-hog, polluting trucks off the road, and that's good too. (I would rather buy a small businessman a 16-foot box truck than send some kid to Iraq without any body armor so he can get his ass shot off making Mosul safe for Halliburton.)

The problem was the way they defined a truck--by Gross Vehicle Weight only. There are ways to define a truck that will ensure that companies buy cargo vehicles and not a Hummer for the plant manager to use to get to work. These weren't implemented. Instead they went with GVWR only, and as a result all these high-GVWR cars became deductible trucks.

How I would define a deductible vehicle:

a. Determine whether the vehicle is primarily a cargo-carrying vehicle or primarily a passenger-carrying vehicle.

b. If the vehicle is primarily a passenger-carrying vehicle, it must be able to comfortably carry no less than 16 adults including the driver.

c. If the vehicle is primarily a cargo-carrying vehicle, measure the vehicle and draw a line at its midpoint. The vehicle's passenger compartment must lie completely in front of this line. Exception: a crew-cab pickup with an eight-foot bed.

d. Full-size sport utility vehicles may be deducted if the business's Standard Industrial Classification is in forestry, construction or agriculture and if the vehicle in question is equipped for rough work in the opinion of the Internal Revenue Service. Deductions of SUVs with leather seats and/or alloy wheels will be disallowed. All tax returns claiming deductions for SUVs will be audited. The audit will consist of inspecting the claimed vehicle.

[Deja Q]

12. Do 'small businesses' include real estate folks?

The fucking gas guzzlers need to be removed totally. People need to find a better way to tell the rest of the world that they're embarrassed by the inadequacy of their genitalia.