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MAXIMUM SEC. 179 DEDUCTION FOR SUVs TO BE SLASHED

October 06, 2004

The Ways and Means Committee website has a list of Senate amendments adopted in today's final session of the conference on the ETI repeal bill. The limitation of the maxumum Sec. 179 deduction for sport-utility vehicles made the bill, probably effective when signed by the president. If you are eyeing that $102,000 business SUV, it's time to make up your mind.

So, what is an SUV? Here's how the Senate bill describes it:

   (i) IN GENERAL. -- The term "sport 
   utility vehicle" means any 4-wheeled
   vehicle --

   (I) which is primarily designed or 
   which can be used to carry passengers
   over public streets, roads, or 
   highways (except any vehicle operated 
   exclusively on a rail or rails),

   (II) which is not subject to section 
   280F (over 6000 lbs - ed.), and

   (III) which is rated at not more than 
   14,000 pounds gross vehicle weight.

   (ii) CERTAIN VEHICLES EXCLUDED. -- 
   Such term does not include any vehicle
   which --

   (I) is designed to have a seating 
   capacity of more than 9 persons behind
   the driver's seat,

   (II) is equipped with a cargo area of 
   at least 6 feet in interior length 
   which is an open area or is designed 
   for use as an open area but is 
   enclosed by a cap and is not readily 
   accessible directly from the passenger
   compartment, or

   (III) has an integral enclosure, fully
   enclosing the driver compartment and 
   load carrying device, does not have 
   seating rearward of the driver's seat,
    and has no body section protruding 
   more than 30 inches ahead of the 
   leading edge of the windshield.

So if you want to take a $102,000 Section 179 deduction for an SUV after the ETI repeal is signed, it needs to have room for more than 9 passengers in back of the drivers seat, or it will have to weigh more than 14,000 lbs. Maybe something like this:

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