$100,000 'SUV Write-Off' to End for Small Businesses

Call it a tax break for the wealthy or a justifiable business expense, but whatever you call it, the SUV tax loophole is almost certain to be closed.

Small business owners have been allowed to write off the full cost of heavy-duty vehicles, weighing at least 6,001 pounds when loaded, as a business expense. Although the provision was designed to benefit farmers, construction workers and others who need big vehicles, white-collar professionals have been using the loophole to buy the priciest SUVs, Reuters reported.


Click Here

Last year, the incentive grew even stronger when lawmakers expanded the write-off from $25,000 to $100,000 and dropped depreciation schedules to allow taxpayers to deduct the full cost all at once.

The provision has come under fire from consumer groups and environmentalists, who call it the Hummer tax loophole. The $100,000 write-off is enough to cover not just the $50,000 Hummer H2 but even a $90,000 Porsche Cayenne Turbo.

Sen. Don Nickles, R-Okla., pushed the reduction after his car-dealer son convinced him it was "a rip-off."

Some Republicans objected to limiting or eliminating the tax break, saying that the move would have the same effect as a tax increase. The Bush administration supported shrinking the benefit.

Congressional negotiators on Wednesday reduced the deduction to $25,000 for most vehicle purchases as part of a bill that would raise money to offset other tax breaks. The legislation, which contains tax changes of all kinds, must be approved by the full House and Senate.

According to Scripps Howard News Service, Keith Ashdown, head of Taxpayers for Common Sense, called the change "a small pearl in this pile of pork."

You may like these other stories...

Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.