SUV Loophole Still Survives

A recent Congressional Research Service Report says that despite restrictive provisions in the 2004 Jobs Act limiting the first-year Sec 179 expensing deduction to $25,000 (was over $100,000), the tax law still encourages business taxpayers to purchase heavy sport utility vehicles (SUVs) for business use.

The report also notes that several pieces of legislation currently in Congress will act to curtail the tax benefits of acquiring heavy SUVs, by either subjecting them to the same luxury auto rules that apply to passenger vehicles or by imposing fuel-efficient incentives for SUVs.  The rapidly rising gasoline prices may in themselves make heavy SUVs unattractive regardless of the tax benefits.