End of the road for $25,000 luxury SUV tax loophole
Small business owners in the market for a new HUMMER or Cadillac Escalade can enjoy up to a $25,000 tax deduction because of a loophole that affects all vehicles weighing over 6,000 pounds. However, the opportunity might not be around for long if Congress members led by Oregon's Earl Blumenauer are able to pass a bill that's expected to be voted on by the House of Reps next month.
Under the new proposal, provisions for legitimate business use will remain, such as discounts for farm vehicles, vans, flatbed trucks and school buses. The original provision in the tax code was to aid farmers and small business owners purchasing heavy work vehicles to recover some of their costs, but this was before popularity of overweight luxury SUVs became widespread. Now the loophole is providing a tax break for small business owners wanting to purchase a luxury vehicle.
Understandably, carmakers and dealers are strongly opposed to any changes, regarding the new proposal as a tax increase for small business owners.
[Source: ABC News]