The Detroit News
reported that Senator Barbara Boxer is drafting legislation to close a tax loophole that allows small business owners to write off $25,000 or more when they purchase large SUVs, pickups and vans. According to the newspaper, Senator Boxer, a Democrat from California, is proposing a bill that would make SUVs equivalent to cars for tax purposes, meaning they would be subject to stricter limits on depreciation.The newspaper also said that current tax law allows any vehicle that weighs 6,000 pounds or more to qualify as business equipment, permitting greater depreciation in the first year of a purchase, typically a deduction of more than $30,000 instead of less than $8,000 for a car.Citing figures from New Jersey market research firm Autodata, the newspaper said that more than 4.2 million SUVs were sold in the US last year, up 6 percent from 2001, making them critical models in vehicle makers’ lines.The paper said Boxer's proposed law would define trucks by separate cargo area rather than weight, allowing pickups and vans to qualify, but not SUVs. Any SUV weighing 14,000 pounds or less -- every SUV on the market today -- would be treated like a car.In a letter to the Senate's chief tax writer, Boxer argued that the SUV loophole distorts the market, “pushing up demand for the largest of all SUVs at a huge cost to the taxpayer,” the Detroit News
said.The newspaper said the vehicle makers, arguing that business equipment purchases can stimulate a flagging economy, plan a counter proposal that would make all vehicles eligible for the same kind of tax break as SUVs.