Congress might end SUV break
October 7, 2004
BY RYAN J. DONMOYER
[font=helvetica,arial]BLOOMBERG[/font]
U.S. House and Senate negotiators Wednesday eliminated a part of the tax code that enables people who own a business to write off the cost of luxury sport-utility vehicles used for work.
Lawmakers including Sen. Don Nickles, R-Okla., said they never intended for doctors and lawyers to get a tax break for buying a Hummer. The provision was originally intended to help farmers buy tractors and other heavy equipment, he said.
The new provision, part of a rewrite of the corporate tax code that may be approved this week, would affect vehicles including Ford Motor Co.'s Lincoln Navigators, General Motors Corp.'s Cadillac Escalades and Hummers, and other SUVs that weigh more than 6,000 pounds.
President George W. Bush signed a $330-billion tax cut into law in 2003 that allowed business owners to take advantage of a higher expensing allowance.
"There are a lot of doctors and lawyers who probably don't need that heavy vehicle," said Nickles, who sponsored the measure.
Two provisions in the 2003 tax law allowed business owners to get the government to subsidize their purchases of heavy luxury vehicles.
One initially let small businesses, including the self-employed, write off as much as $25,000 in equipment purchases. That limit was raised to $100,000, covering more of the cost of $40,000-plus cars such as the Navigator. Dealers advertised the provision to help market their larger models.
A second provision accelerated how quickly buyers can write off the costs of farm equipment, trucks and other vehicles weighing more than 6,000 pounds.
A two-wheel-drive Escalade weighs 6,800 pounds, according to Cadillac's Web site.
Nickles' amendment, adopted by the House-Senate conference committee, would exempt luxury sport-utility vehicles from the $100,000 write-off.
The compromise bill must be passed by the House and Senate before it would go to Bush for his signature.
SOURCE
October 7, 2004
BY RYAN J. DONMOYER
[font=helvetica,arial]BLOOMBERG[/font]
U.S. House and Senate negotiators Wednesday eliminated a part of the tax code that enables people who own a business to write off the cost of luxury sport-utility vehicles used for work.
Lawmakers including Sen. Don Nickles, R-Okla., said they never intended for doctors and lawyers to get a tax break for buying a Hummer. The provision was originally intended to help farmers buy tractors and other heavy equipment, he said.
The new provision, part of a rewrite of the corporate tax code that may be approved this week, would affect vehicles including Ford Motor Co.'s Lincoln Navigators, General Motors Corp.'s Cadillac Escalades and Hummers, and other SUVs that weigh more than 6,000 pounds.
President George W. Bush signed a $330-billion tax cut into law in 2003 that allowed business owners to take advantage of a higher expensing allowance.
"There are a lot of doctors and lawyers who probably don't need that heavy vehicle," said Nickles, who sponsored the measure.
Two provisions in the 2003 tax law allowed business owners to get the government to subsidize their purchases of heavy luxury vehicles.
One initially let small businesses, including the self-employed, write off as much as $25,000 in equipment purchases. That limit was raised to $100,000, covering more of the cost of $40,000-plus cars such as the Navigator. Dealers advertised the provision to help market their larger models.
A second provision accelerated how quickly buyers can write off the costs of farm equipment, trucks and other vehicles weighing more than 6,000 pounds.
A two-wheel-drive Escalade weighs 6,800 pounds, according to Cadillac's Web site.
Nickles' amendment, adopted by the House-Senate conference committee, would exempt luxury sport-utility vehicles from the $100,000 write-off.
The compromise bill must be passed by the House and Senate before it would go to Bush for his signature.
SOURCE