It's About Time! Legislation Would Close Hummer Tax Loophole

Legislation introduced last night would finally close a loophole that allows for tax write-offs for the largest luxury SUVs.

Introduced by Reps. Earl Blumenauer (D-OR), Rahm Emanuel (D-IL) and Allyson Schwartz (D-PA), who all serve on the Ways and Means Committee, as well as Rep. Ed Markey (D-MA), Chairman of the Select Committee on Energy Independence and Global Warming, the legislation would fix a serious mistake in the tax code that provides an additional tax incentive for business purchases of luxury SUVs weighing over 6,000 lbs.

“This bill fixes a perverse, unintended incentive to buy the biggest and most polluting vehicle on the market,” said Congressman Blumenauer.

Originally intended to help businesses buy necessary heavy-duty work vehicles, the “Hummer Tax Loophole” has for years allowed write-offs of anywhere from $100,000 to the current figure of $25,000 for the purchase of the largest, most gas-guzzling luxury SUVs, even as concerns over gas prices and dependence on oil have grown. The change would not affect legitimate business investments in trucks or vans, such as plumber and contractor trucks, farm vehicles, construction vehicles, flatbed trucks, cement mixers, and a variety of other vehicles as designated by the IRS.

Over 30 models of SUVs qualify for the loophole, including some of the least fuel-efficient vehicles on the road today. They include the BMW X5 (EPA rated 16 mpg combined), Cadillac Escalade (14 mpg), Jeep Grand Cherokee (12 mpg) and Ford Expedition (15 mpg).