Stormy
extradinaire d'auteur
Hey guys it just occured to me that I may qualify for this Tax Cut....
being self employed and all...any Accountants want to share the details of this
huge LOOPHOLE.
Here are a couple of articles I found on the subject:
Congress Clears Tax Incentive for SUV Purchases
Fri May 23, 7:08 PM ET
By John Crawley
WASHINGTON (Reuters) - Congress on Friday substantially widened a tax
break that has been used by small businesses as an incentive to
purchase the largest sport utility vehicles and pickup trucks.
Supporters including President Bush (news - web sites) said the
business equipment tax break, which was quadrupled to $100,000 in the
$350 billion tax cut bill that narrowly cleared Congress, is good for
the economy.
But critics called it a loophole that unfairly benefits the auto
industry and provides an unnecessary perk to business people who do
not need, but want to buy the largest, most-polluting and fuel hungry
SUVs.
"People will now do it because they are economically rational enough
to go for the tax break," said David Nemtzow, president of the
Alliance to Save Energy.
And legislators from some cash-strapped states with environmental
concerns say they will close the loophole by disallowing it at the
state level and charging back much of the deduction on state tax
forms.
Oregon state Sen. Charlie Ringo said his "nullification" bill had
passed two key House committees and noted that the New York and
California legislatures were moving similar bills.
Even the auto industry was not behind the three-year initiative,
saying it is too narrow. The deduction applies to vehicles that weigh
more than 6,000 pounds when fully loaded with passengers and cargo,
which includes those classified as trucks for tax purposes.
While the provision would exclude some of the most popular pickups
and SUVs, it would cover dozens of other models, including the
Chevrolet Suburban, the Hummer H-1 and the Ford F-250 pickup and
Expedition SUV.
The three top-selling vehicles in the United States through April
were pickup trucks. According to Ward's Automotive Reports, large
SUVs account for about 5.3 percent of the U.S. market.
The incentive includes additional tax savings for depreciation and
would allow businesses to write off the full cost of their vehicles
in the first year of ownership.
Critics complain the provision widens a benefit originally intended
for farmers and other truck-dependent businesses.
Auto manufacturers would prefer such a benefit cover a greater
variety of vehicles.
================================================
Tax cut could aid SUV market
Write-off increased for business owners
JEFF PLUNGIS GANNETT NEWS SERVICE
WASHINGTON -- President Bush's economic stimulus plan could
triple the size of a little-known tax loophole that some small-
business owners are using to finance purchases of large SUVs.
One of Bush's proposed tax cuts would raise the amount small-
business owners -- including doctors, lawyers and financial advisers --
can write off when buying an SUV for business purposes, from
$25,000 to $75,000. Several consumer groups and lawmakers
have raised concerns about the fairness of the provision. The
debate signals more trouble for a vehicle segment crucial to
Detroit automakers, whose profits have been sustained by the
SUV boom over the last decade.
How did tax policy become the latest clash in an escalating
cultural war over SUVs?
The idea behind the broader tax benefit was that small
businesses could help jump-start the U.S. economy if they spent
more. To encourage entrepreneurs to open their wallets,
Washington expanded the tax deduction for business equipment
to $25,000 in 2003, from $17,500 in 1996. Bush's new plan takes
the deduction limit up to $75,000.
"This is a plan that says that if you are willing to take risk and
invest more, that there's a benefit for doing so," Bush said in
unveiling the initiative Jan. 9.
Tax relief for small businesses has widespread bipartisan support
on Capitol Hill. But critics are focusing on equipment write-offs
used to finance large luxury SUV purchases. The Internal
Revenue Service allows generous tax treatment for trucks, which
the IRS defines as any vehicle with a gross weight of 6,000
pounds or more, regardless of whether it is used to haul goods
or a single person.
The definition was originally intended to exempt farmers and
other small businesses that needed a pickup or cargo van from
limits that apply to luxury vehicles. But the definition was written
well before a wide array of upscale trucks and SUVs hit the
market -- and well before U.S. consumers started using trucks
and SUVs as a substitute for the family car.
The proposed $75,000 deduction on business equipment means
that businesses choosing between a car and an SUV have an
even bigger incentive to go for the SUV. Cars are not eligible for
this deduction.
The Bush proposal comes on top of a stimulus bill passed last
year in the wake of the Sept. 11 attacks that gave businesses an
extra 30 percent accelerated depreciation on cars and trucks
used as business equipment. Any remaining costs can be
deducted on a regular depreciation scale of 20 percent in the first
year of ownership.
Small-business owners have been using the $25,000 equipment
deduction to help finance purchases of trucks and SUVs. With
vehicles in the $47,000 price range, such as the Ford Excursion,
more than $30,000 of the purchase price can be deducted,
reducing a small-business tax bill by about $12,600. Raising the
cap on business equipment to $75,000 will make it possible to
write off the entire cost of vehicles such as the Hummer H2 or
BMW X5 in the first year. A small-business purchase of a car,
by contrast, might take 10 years to 20 years to fully depreciate.
A business owner purchasing a Hummer H1 for business purposes
could write off $25,000 of the purchase price as an equipment
investment, for example. Under the provision passed in Congress
last year to stimulate the economy, another 30
percent of the remaining purchase price, or $24,356, could also
be deducted. The Hummer owner could then deduct 20 percent of
the remaining purchase price, or $11,366, under regular
depreciation rules. That's a total deduction of $60,722.
Under the Bush plan, the total deduction for a Hummer H1 will go
up to a potential $88,722.
"Oh, you've got to be kidding," said Skip Barnett, a Hummer
dealer in Atlanta. "That would make a Hummer practically free."
Barnett said most of his buyers were small-business owners with
annual incomes of $200,000 or more. He said more and more of
his customers were asking about the tax deduction. "We've been
selling the truck hands down," he said.
Environmentalists and tax reformers want restrictions on how
businesses can use the equipment tax break. They are confident
they will find allies on Capitol Hill in their efforts to rein in what
they describe as a perverse incentive to drive business owners
into purchasing the largest, most gas-guzzling SUVs.
"Leave it to the Bush administration to try to make an even more
outrageous a taxpayer rip-off that benefits the rich," said Daniel
Becker, director of the global warming and energy program at the
Sierra Club. "I'm sure there will be a fight over this."
?2003 The Olympian Return to Business section
Finally, a write off I can use........ :flippy:
-Astrya
being self employed and all...any Accountants want to share the details of this
huge LOOPHOLE.
Here are a couple of articles I found on the subject:
Congress Clears Tax Incentive for SUV Purchases
Fri May 23, 7:08 PM ET
By John Crawley
WASHINGTON (Reuters) - Congress on Friday substantially widened a tax
break that has been used by small businesses as an incentive to
purchase the largest sport utility vehicles and pickup trucks.
Supporters including President Bush (news - web sites) said the
business equipment tax break, which was quadrupled to $100,000 in the
$350 billion tax cut bill that narrowly cleared Congress, is good for
the economy.
But critics called it a loophole that unfairly benefits the auto
industry and provides an unnecessary perk to business people who do
not need, but want to buy the largest, most-polluting and fuel hungry
SUVs.
"People will now do it because they are economically rational enough
to go for the tax break," said David Nemtzow, president of the
Alliance to Save Energy.
And legislators from some cash-strapped states with environmental
concerns say they will close the loophole by disallowing it at the
state level and charging back much of the deduction on state tax
forms.
Oregon state Sen. Charlie Ringo said his "nullification" bill had
passed two key House committees and noted that the New York and
California legislatures were moving similar bills.
Even the auto industry was not behind the three-year initiative,
saying it is too narrow. The deduction applies to vehicles that weigh
more than 6,000 pounds when fully loaded with passengers and cargo,
which includes those classified as trucks for tax purposes.
While the provision would exclude some of the most popular pickups
and SUVs, it would cover dozens of other models, including the
Chevrolet Suburban, the Hummer H-1 and the Ford F-250 pickup and
Expedition SUV.
The three top-selling vehicles in the United States through April
were pickup trucks. According to Ward's Automotive Reports, large
SUVs account for about 5.3 percent of the U.S. market.
The incentive includes additional tax savings for depreciation and
would allow businesses to write off the full cost of their vehicles
in the first year of ownership.
Critics complain the provision widens a benefit originally intended
for farmers and other truck-dependent businesses.
Auto manufacturers would prefer such a benefit cover a greater
variety of vehicles.
================================================
Tax cut could aid SUV market
Write-off increased for business owners
JEFF PLUNGIS GANNETT NEWS SERVICE
WASHINGTON -- President Bush's economic stimulus plan could
triple the size of a little-known tax loophole that some small-
business owners are using to finance purchases of large SUVs.
One of Bush's proposed tax cuts would raise the amount small-
business owners -- including doctors, lawyers and financial advisers --
can write off when buying an SUV for business purposes, from
$25,000 to $75,000. Several consumer groups and lawmakers
have raised concerns about the fairness of the provision. The
debate signals more trouble for a vehicle segment crucial to
Detroit automakers, whose profits have been sustained by the
SUV boom over the last decade.
How did tax policy become the latest clash in an escalating
cultural war over SUVs?
The idea behind the broader tax benefit was that small
businesses could help jump-start the U.S. economy if they spent
more. To encourage entrepreneurs to open their wallets,
Washington expanded the tax deduction for business equipment
to $25,000 in 2003, from $17,500 in 1996. Bush's new plan takes
the deduction limit up to $75,000.
"This is a plan that says that if you are willing to take risk and
invest more, that there's a benefit for doing so," Bush said in
unveiling the initiative Jan. 9.
Tax relief for small businesses has widespread bipartisan support
on Capitol Hill. But critics are focusing on equipment write-offs
used to finance large luxury SUV purchases. The Internal
Revenue Service allows generous tax treatment for trucks, which
the IRS defines as any vehicle with a gross weight of 6,000
pounds or more, regardless of whether it is used to haul goods
or a single person.
The definition was originally intended to exempt farmers and
other small businesses that needed a pickup or cargo van from
limits that apply to luxury vehicles. But the definition was written
well before a wide array of upscale trucks and SUVs hit the
market -- and well before U.S. consumers started using trucks
and SUVs as a substitute for the family car.
The proposed $75,000 deduction on business equipment means
that businesses choosing between a car and an SUV have an
even bigger incentive to go for the SUV. Cars are not eligible for
this deduction.
The Bush proposal comes on top of a stimulus bill passed last
year in the wake of the Sept. 11 attacks that gave businesses an
extra 30 percent accelerated depreciation on cars and trucks
used as business equipment. Any remaining costs can be
deducted on a regular depreciation scale of 20 percent in the first
year of ownership.
Small-business owners have been using the $25,000 equipment
deduction to help finance purchases of trucks and SUVs. With
vehicles in the $47,000 price range, such as the Ford Excursion,
more than $30,000 of the purchase price can be deducted,
reducing a small-business tax bill by about $12,600. Raising the
cap on business equipment to $75,000 will make it possible to
write off the entire cost of vehicles such as the Hummer H2 or
BMW X5 in the first year. A small-business purchase of a car,
by contrast, might take 10 years to 20 years to fully depreciate.
A business owner purchasing a Hummer H1 for business purposes
could write off $25,000 of the purchase price as an equipment
investment, for example. Under the provision passed in Congress
last year to stimulate the economy, another 30
percent of the remaining purchase price, or $24,356, could also
be deducted. The Hummer owner could then deduct 20 percent of
the remaining purchase price, or $11,366, under regular
depreciation rules. That's a total deduction of $60,722.
Under the Bush plan, the total deduction for a Hummer H1 will go
up to a potential $88,722.
"Oh, you've got to be kidding," said Skip Barnett, a Hummer
dealer in Atlanta. "That would make a Hummer practically free."
Barnett said most of his buyers were small-business owners with
annual incomes of $200,000 or more. He said more and more of
his customers were asking about the tax deduction. "We've been
selling the truck hands down," he said.
Environmentalists and tax reformers want restrictions on how
businesses can use the equipment tax break. They are confident
they will find allies on Capitol Hill in their efforts to rein in what
they describe as a perverse incentive to drive business owners
into purchasing the largest, most gas-guzzling SUVs.
"Leave it to the Bush administration to try to make an even more
outrageous a taxpayer rip-off that benefits the rich," said Daniel
Becker, director of the global warming and energy program at the
Sierra Club. "I'm sure there will be a fight over this."
?2003 The Olympian Return to Business section
Finally, a write off I can use........ :flippy:
-Astrya
