[GreenYes] SUV Tax Break To Boot

["Peter Anderson" <anderson@recycleworlds.net>]

WALL STREET JOURNAL -- 12/19/02

SUVs Get Big Tax Break
As Drivers Seize Loophole
By JEFFREY BALL and KAREN LUNDEGAARD
Staff Reporters of THE WALL STREET JOURNAL

"If you're a business owner, you're in for a sweet deal on a shiny gift this
holiday: Thousands of dollars off the price of a big sport-utility vehicle.

"But don't thank Santa -- thank Uncle Sam.

"As a result of a quirk of federal tax law, business owners are allowed to
depreciate SUVs and pickups more quickly than cars. The discrepancy has been
around for nearly two decades, but it's getting new attention amid the
soaring popularity of SUVs and pickups as suburban people-movers. As the end
of the year approaches, the tax break gets particularly popular, since
business owners often are in the market for ways to cut their taxable
income.

"The deduction stems from the longstanding and somewhat bizarre
classification of SUVs as "light trucks" rather than "cars." That means a
tax break that was at least partly intended to help farmers buy pickup
trucks is now being applied to today's quintessential suburban passenger
vehicle.

"The law gives people who qualify an immediate deduction of as much as
$24,000 -- which grows to $25,000 next year -- off the price of an SUV.
Plus, until 2004, there's a bonus deduction of 30% of the rest of the cost
of the truck. Both these deductions are on top of the regular five-year
depreciation that would apply to light trucks bought as business
transportation. The only catch: To get all these breaks, you have to buy a
truck that weighs over 6,000 pounds. The Chevy Suburban makes it, but the
Chevy Blazer doesn't.

Major Price Cut

"It adds up to a significant price cut. Ford Motor Co.'s Land Rover Range
Rover, for instance, has a list price of $71,865, but the combined tax
breaks effectively knock $21,560 off the price, over the course of five
years, assuming a tax rate of 30%.
"The deduction, described in an article Wednesday in the Detroit News, comes
at a time of mounting debate over U.S. dependence on foreign oil. SUVs and
pickups typically are far less fuel-efficient than passenger cars. That
discrepancy -- and the debate over automotive greenhouse-gas emissions --
has become an increasingly hot political issue since light trucks now
account for about half of the total U.S. new-vehicle market.

"..."
______________________________
Peter Anderson
RECYCLEWORLDS CONSULTING Corp
4513 Vernon Blvd. Suite 15
Madison, WI 53705
Ph:    (608) 231-1100
Fax:   (608) 233-0011
Cell    (608) 438-9062
email: anderson@recycleworlds.net


******************************************
To post to the greenyes list,
email to: greenyes@grrn.org

subscription, faq and netiquette info for
this list are available here:
http://greenyes.grrn.org/
Please be sure to read the faq and netiquette
pages before posting.
******************************************