Tax Preferences for Sport Utility Vehicles (Suvs)
Current Law and Legislative Initiatives in the 109th Congressdi: Gary Guenther
The surge
in domestic popularity of large sport utility vehicles (SUVs) since the early
1990s has stirred a debate over what steps the federal government should take,
if any, to mitigate their effects on the environment, highway safety, traffic
congestion, and U.S. dependence on foreign sources of oil. Legislative activity
in the 108th Congress expanded the scope of the debate to include the ways in
which the federal tax code encourages the purchase of heavy-duty SUVs,
primarily for business use. In May 2003, Congress passed a measure (the Jobs
and Growth Tax Relief Reconciliation Act of 2003) that raised the maximum
expensing allowance under section 179 of the Internal Revenue Code (IRC) for
these vehicles to $100,000 from May 2003 through the end of 2005; the American
Jobs Creation Act of 2004 lowered the allowance to $25,000, as of October 22,
2004.
