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TRADE BILL WOULD SLASH SUV DEDUCTIONS
October 10, 2003
A provision in Senator Grassley's "JOBS" bill would limit the amount of "Section 179 deduction" available for passenger vehicles weighing over 3 tons. The provision, pointed out this week by the Wall Street Journal (subscription required), would limit the Section 179 deduciton for such vehicles to $25,000. The current limit is $100,000.
The tax law now favors the puchase of sport utility vehicles and other big units. While smaller cars are subject to strict depreciation and Section 179 limits -- the maximum deduction is based on a $15,300 vehicle cost for 2003 - SUVs over 6000 lbs are exempt. While The JOBS bill will restrict the Section 179 deduction for SUVs, it would not subject them to the other auto depreciation limits.
Any new limits would take effect for vehicles purchased after the date of enactment. The future of the JOBS bill is uncertain.
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