• Jul 2, 2007


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]


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    • 1 Second Ago
  • 24 Comments
      • 7 Years Ago
      Thanks, Earl!
      • 7 Years Ago
      Listen, everyone has their own opinion about tax breaks. Some get them for great big SUV's and some get them for eco-greeners. And I don't give a crap about the glaciers that are supposedly melting. I don't believe everything I read or see on the activist..err...'news' reports.
        • 7 Years Ago
        "And I don't give a crap about the glaciers that are supposedly melting."

        It never ceases to amaze me how proud some people are of their own abject, self-destructive ignorance.
      • 7 Years Ago
      "So if someone wants to purchase an Escalade or any other large SUV for business use why shouldn't they qualify?"

      Because there is no justifiable business use for an Escalade.
      • 7 Years Ago
      I can't tell you how many real estate agents I see around my neck of the woods driving Hummer H2's. Now, do they REALLY need to be driving around in something like that?? I think that's what closing this loophole is really intended to stop.....
      • 7 Years Ago
      FINALLY! Why should I pay for some soccer-mom's ride just because she picked a vehicle that gets REALLY bad gas mileage!
      • 7 Years Ago
      Seeing as Congress doesn't have a problem subsidizing farm income, 62% of which is straight from tax payer pockets, I think they have their priorities out of line. Oh wait, Congressmen have no priorities other than pandering to their constituents in order to stay in office.
      • 7 Years Ago
      You are not entirely correct. Section 179 of the IRC, which allows for this "loophole", allows businesses to deduct up to $108,000 for the purchase of qualified business property. Property that qualifies is not just limited to vehicles. Congress already closed the loophole by reducing the 179 deduction for SUV's to $25,000.

      It really does not make much of a difference anyway. Even if congress writes into the tax law that no SUV's qualify for the sec. 179 deduction they would still be able to depreciate the SUV over 5 years, which in a lot of cases would be better tax planning. Net result is the same, the entire asset is written off. I just don't get all this debate in congress over a timing difference.
      • 7 Years Ago
      these SUVs are used by businesses that need to keep their products from prying eyes who would like nothing better to do than rip them off. every surveyor i know has a suburban to haul their valuable equipment inside. if every able body person in this country were required to work instead of being on welfare they would not have time to be ripping off other people stuff
        • 7 Years Ago
        If people are buying these vehicles for purely utilitarian motives, they should check out an E-350 cargo van. I'm sure they will find the E-350 offers much more privacy, and this assures me that I'm not paying for there status symbol.
        • 7 Years Ago
        i can tell you are not in business where appearance means something to attract customers
      • 7 Years Ago
      "So if someone wants to purchase an Escalade or any other large SUV for business use why shouldn't they qualify? "

      Because the intent of the law is differing from how it's being used. A luxury SUV is just that--a luxury. The law was meant for vehicles primarily geared towards commercial use, which neither an Escalade or Navigator are.
      • 7 Years Ago
      It is about time they remove this loophole for various reasons, but this is just the tip of the melting iceberg, as there is a plethora of others that need revamping too.
      • 7 Years Ago
      The problem with this loop hole is that many small business owners know about this loop hole, and can save $25,000 buying a large truck or suv, but if they bought a small car (what they really need) is doesn't qualify. So they buy a large truck or SUV because it is cost effective to do so! give the same tax break across the board to small business owners, and you would probably have a lot more small business owners buying the vehicles they need, rather than the vehicle that gets the tax deduction.
        • 7 Years Ago
        Icon,

        With all due respect, you do not understand how this works.

        Getting a $25,000 tax deduction is not same thing as saving or reducing your tax liability by $25,000.


      • 7 Years Ago
      Actually, an Escalade is a great vehicle for business people who need to take multiple clients to an offsite location. One Escalade is better than two small cars carrying seven large adults to single location.
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