To all who own SUVs, try to start a small business.
Nov. 7 — When Congress this year decided to allow small-business owners, doctors, lawyers and real estate salespeople to deduct up to $100,000 from their taxable income for the purchase of a luxury SUV, Texas car-dealership magnate Jerry Reynolds could hardly believe his good fortune.
HE TOOK to the radio to spread the news, drafted a treatise for the Internet, and last week, the man known around Dallas simply as “the car guy” began advertising in the Dallas Morning News. “It’s a loophole.”
Since 1997, anyone deemed to be a small-business owner for tax purposes could write off some amount of equipment purchases each year — up to $18,000 worth that first year, up to $25,000 in 2003. Since 1984, the Internal Revenue Service, thinking more about Chevy Silverado pickups than Cadillac Escalades, has considered vehicles that weigh more than 6,000 pounds to be deductible business equipment.
When lawmakers began writing this year’s $350 billion tax-cut plan, they looked for ways to help the economy by encouraging small businesses to invest in new equipment. Congress raised the maximum annual value of the deduction to $100,000, through 2005. At the time, environmentalists implored tax writers to disqualify SUVs, but lawmakers declined. With the top business tax rate at 35 percent, Washington effectively cut $18,900 from the price of a $54,000 Escalade, bringing its cost more in line with an Oldsmobile Aurora sedan.
So many new models are just over 6,000 pounds that Reynolds suspects that automakers have their eyes on the tax code. A 2003 two-wheel-drive Dodge Durango weighs 6,050 pounds.
http://www.msnbc.com/news/990356.asp 
