Barbara Boxer: “today, I am introducing the ``The SUV Business Tax Loophole Closure Act'' along with Senator Schumer and Senator Clinton…”

“today, I am introducing the ``The SUV Business Tax Loophole Closure Act'' along with Senator Schumer and Senator Clinton to close a loophole in tax law that some are inappropriately using to deduct a majority of the cost of the largest SUVs on the market. To encourage small business growth, Congress has created a number of mechanisms for small business owners and the self-employed to be able to deduct a variety of capital expenses immediately. In order to keep people from abusing these deductions to buy passenger cars for personal use and call it a business expense, Congress capped the deduction for car purchases at $7,660 in the first year, and $4,900 in the second year after the purchase. But to help farmers and small business owners that need pick-up trucks or vans for business purposes, Congress excluded from the car cap those vehicles that weigh more than 6,000 pounds. Vehicles larger than 6,000 pounds are eligible for the full capital expense--$25,000. This tax policy was created before the advent of SUVs, many of which weigh more than 6,000 pounds. As a result, people who do not need a large vehicle for business purposes are buying the largest Hummer SUVs, Mercedes SUVs, BMW SUVs and other super-sized SUVs and deducting a significant portion of the cost from their taxes immediately.”