Energy Bill Fails to End SUV Tax Loophole

FindLaw ^ | Nov. 17, 2003 | Reuters

[berserker]

WASHINGTON (Reuters) - Republican leaders on Monday killed a Senate plan to close a loophole allowing small-business owners to deduct up to $100,000 from their taxable income for buying a luxury sport utility vehicle.

Language eliminating the SUV loophole was inserted into the Senate's version of a broad energy bill, which also has $23.4 billion in tax breaks for oil, natural gas, coal and other energy sources. But the provision was dropped after House negotiators rejected the Senate's change.

Republican leaders swiftly moved to ensure no mention of the loophole was included in the final version of the energy bill, which is expected to go to the full House and Senate for votes later this week.

Republican Sen. Don Nickles of Oklahoma offered the proposal to drop the tax break for doctors, lawyers, real estate agents and other business owners who buy expensive SUVs. "There is enormous abuse of this provision. People are driving SUVs through this loophole," Nickles said.

The deduction of up to $100,000 from taxable income dramatically cut the price of a Hummer H2, Land Rover and other expensive, gas-guzzling SUVs for small business owners in the highest tax bracket.

The loophole was part of the $350 billion Bush tax cut enacted in May and applied to the purchase of a vehicle for business use weighing 6,000 pounds or more.

[Roughneck]

People are driving SUVs through this loophole," Nickles said

It's none of Nickles business what free americans drive.

[steplock]

The "loophole" states that a business can deduct LEGAL EXPENSES for vehicles. The "SUV" label is a LIE! It doesn't say that you can deduct a SUV.

POLITICIANS - LAWYERS = Bunch of Liars.! Come to think of it, that was redundant, wasn't it?

[Roughneck]

This might be the wrong thread to post this, but if all the enviro-weanies lived in bamboo houses, peed outside, drove yugos or walked - AND shut the H-e-double ell up, enough energy would be saved to satisfy, at least, THEMSELVES!

[Wright is right!]

Actually, the "loophole" is an allowable deduction for business EQUIPMENT. Up to $100,000. A bidness may buy any equipment it needs and, rather than depreciating it out, expense it in one year. Equipment includes printing presses, examination tables, compooters, telephone systems, tool-and-die making equipment, lathes, mill saws, laser eye surgery devices....list is endless. Included are motor vehicles.

The Left has simply seized upon that one item of allowable equipment to label the entire law as an SUV law.

Michael

[Paleo Conservative]

Up to $100,000. A bidness may buy any equipment it needs and, rather than depreciating it out, expense it in one year. Equipment includes printing presses, examination tables, compooters, telephone systems, tool-and-die making equipment, lathes, mill saws, laser eye surgery devices....list is endless. Included are motor vehicles.

It's much better than have to amortize small capital expenditures. I once had to amortize a 16 mhz 386 over 7 years.

[mishka]

You're right.
People don't know what they're talking about with this issue.
Everybody thinks there is some "SUV Loophole", and there isn't.
We understand that some of you haven't run a business, but don't make some big objection when you don't really understand.

This "deduction" is not even limited to vehicles. These are normal business deductions, that businesses make all the time. Deductions are made for equipment of ALL sorts, and there has always been a way to deduct this stuff. One of the things could be vehicles needed for business use, but it could be computers, machines, whatever. Businesses spend most of what they make just to keep things running. They can't pay tax on all this stuff, because it's not profit. You can't tell a business owner which kind of "die-cutter" or "plastic-injector" he should buy, only he knows the best one for his industry. And you can't tell him what car would be most efficient for his industry. The SUV has long been a good choice for small business owners, as you're always running around and picking up carloads of stuff that you don't want rained on, yet you need something to take clients to meetings with that's not an empty van. The deductions allows owners to invest in their companies, which propels the economy, helps the employees, and creates more profit that can be taxed anyway! I know most of you here know all this, but in case somebody doesn't get it, it's just that simple. It's NOT an "SUV" deduction...it's a business deduction just like any other. And if the author's "deduction of up to $100,000" is the regular business deduction, it wouldn't matter if this were lowered, because the buyer could STILL deduct the cost over 5-years anyway...it's a "loophole" to take the deduction at one time (which stimulates the economy too) instead of over 5-years, but doesn't even change the fact that it's a deduction! So it's not an SUV loophole, it's a "regular business expense take-it-in-one-year-instead-of-five" standard deduction. If a doctor doesn't really need an SUV as a normal business deduction then he can be audited and busted. But to exclude ALL small business owners from certain expenses YOU don't like is to tie the hands of those who know best.

And if this whole stink is REALLY just because you think SUVs are "bad for the environment", then just say that and try to ban them completely (is it really better for the environment if they just pay more of your taxes or is it just a cover for more "tax the successful"!)...and consider this about how "bad" they are (from a previous post I made):

I always shake my head when I hear about some SUV hater. Beyond the "he earned it", which is obvious, are further facts that are ignored. One is that I know people who commute hours every day, and even if their car gets 50% better gas mileage, I know they're "wasting" 5 times more gas (and polluting 5 times as much, or whatever) than I am because I choose to live near my job. Also, my girlfriend's old Civic got about the same mileage as my SUV, beause it was old and was getting poor mileage. Not to mention that during the crazy LA floods this week, there were many SUVs who made it home, while others were stuck in Watts or Compton in the water. So the SUV-phobes should alter their attack on SUVs by saying "...those gas-guzzling, unless you live close to your work, oversized, unless you need to be safe in an emergency, polluting, unless you compare it to many older cars next to them on the road, SUVs...".
And people who want to spraypaint SUVs to show how "green" they are, should remember to stop along the way and spraypaint all the older cars, cars of people who commute, and cars who are made in countries who's environmental laws are more lax than ours, go park in Watts overnight, and THEN start spraypainting the SUVs - which means they'll never GET to the SUVs.

[itsahoot]

It's none of Nickles business what free americans drive.

It is if they are doing it on my tax nickel. I don't care what they drive if they buy it with their earnings, which is they way I got mine.

[Roughneck]

It is if they are doing it on my tax nickel.

Do you feel the same way about welfare, and socials services for illegal aliens - their hands are in our pockets there as well - these folks are either lazy or lawbreakers, yet our tax dollars pay for it.

I'd rather give tax breaks to productive members of society like business owners who provide jobs for our people. Besides, the tax break is not "paying" for anyone elses SUV, read the article.

The other day I was passing by a new "Habitat for Hunanity" house that was profiled in our paper - ya know what was patrked out front? An SUV worth $26,000. Habitat for Humanity my butt...thats the kind of folks who have food stamps on MY TAX DOLLAR so they can have a really nice vehicle.

[itsahoot]

Do you feel the same way about welfare, and socials services for illegal aliens - their hands are in our pockets there as well - these folks are either lazy or lawbreakers, yet our tax dollars pay for it.

Sure do, my druthers would be that neither of them get my money :)

[Tumbleweed_Connection]

Damn! I thought this was in Gen Interest.