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I recall a few years ago getting a phone call from a Realtor friend of mine. She said she was going to buy an SUV to take advantage of the tax loophole that allowed her to write off her car as long as it weighed over 6,000 pounds. She asked me if she should get a Tahoe or a Navigator. I said the first thing you might want to get is a conscience.
Today the loophole gives small business operators, whether they are farmers, contractors or Realtors, a $25,000 tax deduction if the car they buy weighs over 6,000 pounds. That scam, though, may be mercifully going away. Congresspeople, led by Oregon’s Earl Blumenauer, are trying to pass a bill that’s expected to be voted on by the House of Reps next month.
Under the new proposal, provisions for legit business use will remain, such as farm vehicles, vans, flatbed trucks and school buses. The Realtors, Accountants and Beauty Parlor owners who have been using the loophole to buy gas guzzling SUVs they don’t need instead of passenger cars will be out of luck…finally!
Big surprise here—the carmakers and auto dealer trade groups are strongly opposed to any changes, regarding the new proposal as a tax increase for small business owners.