It’s like a B-grade horror flick, The Return of the SUV. Buried in the new tax law passed in December is provision to write off 100% (you read that correctly) of heavy Sports Utility Vehicles if it is used 100% for business.

A Brief History

Heavy SUV’s have long qualified for the popular Section 179 deduction allowing the 100% deduction for equipment purchased in a given year. The real boom for SUV’s occurred when the dollar limit was raised in the early 2000’s. With the limit raised to $100,000 and higher, even a Hummer was fully extensible. That didn’t sit well with the Green crowd, so the section 179 limit was lowered for heavy SUV to only $25,000. A large number, but still below what most of these vehicles cost. The idea being that would slow the sale of these gas guzzlers.

New Life

With the 2010 Tax Relief Act, there is a limited-time 100% bonus depreciation (not to be confused with the Section 179 deduction) that allows 100% deduction for vehicles that have a Gross Vehicle Weight (GVW) in excess of 6,000 pounds. I would expect this incentive to spur sales, since SUV’s, unlike other high dollar vehicles, aren’t subject to the luxury auto dollar limitations that passenger vehicles are. Qualifying vehicles must be placed in service between September 8th, 2010 and December 31st, 2011, and must be 100% business use.

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