Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

“Hummer Tax Loophole” Under Attack

June 26, 2007

A new bill could spell the end of the “Hummer tax loophole,” a law that allows businesses to purchase SUVs and other large vehicles with a federal tax deduction, reports National Public Radio.The original law was intended to give a tax break to businesses purchasing work vehicles. To make sure the tax break wasn’t used for luxury cars, Congress changed the law in 1984 to exclude most vehicles weighing 6,000 pounds or less.However, passenger cars became larger, allowing businesses to use the tax break to purchase Hummers and monster sport utility vehicles. Among the models eligible for tax write-offs worth about $25,000 are the Hummer H2, the Cadillac Escalade and the Jeep Commander.Rep. Earl Blumenauer, D-Ore., has introduced legislation to close that loophole. The bill would force individuals to prove that a heavy vehicle is crucial to their daily business operation. They hope this will level the playing field so hybrids and more fuel-efficient cars can compete with SUVs. Blumenauer's legislation attempts to preserve the original intent of the tax break by allowing businesses to continue to receive the tax benefit for vehicles such as vans, farm equipment, forklifts and buses.
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In the USA, a tax assessed by some states either on a lump-sum basis for a purchased vehicle or on a periodic basis on rental payments in the case of a leased vehicle.

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