SUV tax writeoff going away?

[Dan]

Apparently there was an article in yesterday's Wall Street Journal, "Personal Journal" section about this. You need a subscription to view the whole article online but:

Highlights from the article:

Last week, the Senate Finance Committee quietly reduced to $25,000 the $100,000 a small-business write-off for Hummers, Ford Excursions and other large SUV's, amid criticism that the tax laws were promoting purchases of gas guzzlers.

The outlook for the SUV tax break is still hazy, as the House legislation doesn't contain a similar measure.

Under the $350 billion Bush tax cut enacted in May, small-business owners could write off $100,000 in the first year for the purchase of a vehicle for business use weighing 6,000 pounds or more. The "Section 179" expensing break, which lasts through 2005, was aimed at encouraging small businesses to invest in any new equipment.

"Small business" covers a wide swath of people, including doctors and real-estate agents, shopkeepers and manufacturers. Approximately 24 million Americans -- anyone filing a Schedule C or corporate tax return -- could be eligible for the $100,000 write-off when they buy a vehicle like the GMC Yukon, which weighs 6,500 pounds, or the slightly larger Ford Expedition, which is 6,900 pounds.

*^*&%$&^#%@%#@$%*& http://www.elcova.com/infopop/emoticons/icon_mad.gif

- Dan

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SUT on order 12/02. 10 months down, 8 to go!
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[Dan]

Apparently there was an article in yesterday's Wall Street Journal, "Personal Journal" section about this. You need a subscription to view the whole article online but:

Highlights from the article:

Last week, the Senate Finance Committee quietly reduced to $25,000 the $100,000 a small-business write-off for Hummers, Ford Excursions and other large SUV's, amid criticism that the tax laws were promoting purchases of gas guzzlers.

The outlook for the SUV tax break is still hazy, as the House legislation doesn't contain a similar measure.

Under the $350 billion Bush tax cut enacted in May, small-business owners could write off $100,000 in the first year for the purchase of a vehicle for business use weighing 6,000 pounds or more. The "Section 179" expensing break, which lasts through 2005, was aimed at encouraging small businesses to invest in any new equipment.

"Small business" covers a wide swath of people, including doctors and real-estate agents, shopkeepers and manufacturers. Approximately 24 million Americans -- anyone filing a Schedule C or corporate tax return -- could be eligible for the $100,000 write-off when they buy a vehicle like the GMC Yukon, which weighs 6,500 pounds, or the slightly larger Ford Expedition, which is 6,900 pounds.

*^*&%$&^#%@%#@$%*& http://www.elcova.com/infopop/emoticons/icon_mad.gif

- Dan

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SUT on order 12/02. 10 months down, 8 to go!
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[maybe some day...]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Dan:
Apparently there was an article in yesterday's Wall Street Journal, "Personal Journal" section about this. You need a subscription to view the whole article online but:

- Dan

<HR></BLOCKQUOTE>

To: National Desk

Contact: Keith Ashdown of Taxpayers for Common Sense, 202-546-8500, ext. 110

WASHINGTON, Oct. 3 /U.S. Newswire/ -- The Senate Finance Committee voted earlier this week to shrink a tax deduction for large Sport Utility Vehicles from $100,000 to $25,000, according to Taxpayers for Common Sense, a national budget watchdog organization.

"While this hummer of a tax break needs to be run over and killed, shrinking of it is a good first step," said Keith Ashdown, Vice President of Policy at Taxpayers for Common Sense. "In light of record budget deficits, the Senators did the right thing in trying to limit one of the biggest giveaways in the tax code."

The current law allows small business owners to deduct up to $100,000 of the purchase price of trucks weighing at least 6,000 pounds, including more than 38 Sport Utility Vehicles. The Senate Finance Committee proposal modifies the credit so that the SUV models can only receive a $25,000 deduction. This would reverse the deduction to how it was before the $ 350 billion economic stimulus package increased the expensing for business equipment to $100,000.

The original $ 25,000 break was created to help farmers purchase light trucks and tractors without having to pay a tax assessed on other expensive vehicles. But, the provision can provide massive financial benefits: the write-off for a 6,000-pound SUV can translate to a windfall of $33,000. Car dealers handling the heavier SUVs quickly took advantage of the loophole. The Joint Committee on Taxation estimated that closing the loophole could generate nearly $ 1.3 billion in revenue over 10 years.

"As long as SUVs are flying off of dealership lots, the current break makes no fiscal sense. This decision moves us one step closer to eliminating this inequitable tax break," continued Ashdown. "While it isn't a knock-out punch, it is definitely a body-blow to this outrageous loophole. "

The SUV provision is part S. 1637, the "Jumpstart Our Business Strength" (JOBS) Act.

http://www.usnewswire.com/

[maybe some day...]

"The New York Times"

The Luxury All-Terrain Boondoggle

ax-bill writers in the Senate are trying to curtail a notorious "business" write-off of tens of thousands of dollars on the cost of an oversized sports utility vehicle, a gilded loophole the affluent have been driving behemoth Hummers and Cadillacs and Lincolns through at taxpayers' expense.

It would probably astonish humbler motorists to know that the gas-guzzling roadrunners of excess that just blew past them on the Interstate are eased along the way by a law that was intended to help working farmers and other small-business owners afford light trucks. Under the tax law, this category was defined as vehicles weighing 6,000 pounds or more, and people who need such trucks for their work could write off all or part of the cost as a business expense. That provision worked well enough to distinguish such vehicles from luxury models until automakers began outdoing one another in evolving S.U.V. models upward and outward like football linemen. When S.U.V.'s reached that weight, the tax code started feeding the desire of some buyers to flaunt chrome-plated affluence.

S.U.V. dealers lost no time in seizing on this selling point, even including the tax write-off possibilities in ads as that ultraluxury extra. Buyers are lured by deductions of up to $100,000 of the cost if they are bold enough to claim full-time business use of an S.U.V.; a 50 percent business claim can net a $50,000 write-off. The maximum used to be $25,000 for small-business equipment, but it was raised to $100,000 as part of the Bush package of outsized tax-cut sweeteners for the well-off. Under a move afoot in the Senate Finance Committee, the maximum would be cut back to $25,000, which would cover a farm truck or construction-site vehicle. Proponents figure that this would reclaim $130 million a year in revenues that are now lost through subsidizing an outlet for highway hubris.

[NJ H2]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
Contact: Keith Ashdown of Taxpayers for Common Sense, 202-546-8500, ext. 110
<HR></BLOCKQUOTE>
According to Keith Ashdown, (if this gets passed) it would only be for SUV's purchased after the date it was passed. So hurry up and buy your Hummer now! http://www.elcova.com/infopop/emoticons/icon_biggrin.gif

[Buckeye Hummer]

I just spoke to my accountant. His opinion is that the Bush admin. will probably knock it down but you never know. It sounds to me like we need a mad rush to the dealers before something stupid like this happens.

[89vette]

If I buy a Hummer instead of a much less expensive truck because of the tax incentive, doesn't that mean that:

A. GM makes a bigger profit and pays more taxes.
B. More workers are employed at the Hummer factory and all the suppliers and they make more money and pay more taxes plus they have a job.
C. The state gets more money in sales tax.

Am I off base here? The country needs more sources of wealth and not more sources of revenue. Give the people the money. The more money they make, the more they spend and the better off we all are. The Democratic party has truly turned into a socialist party.

03 Sunset H2!
89 Vette
02 Escalade

[Buckeye Hummer]

89vette,

Agreed, if this becomes law I would dump the idea of buying an H1 solely for that reason. Dems suck, they never support business and cripple our defense. The economy has signs of improvement from the market to decreases in jobless claims. Let's hope it stays that way and George can clean up Iraq FAST!