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I was talking to a friend in Colorado today and she brought up something her tax accountant had mentioned. It was to do with the enourmous increase in numbers of Hummers on the roads and in her neighbourhood.

The “Jobs and Growth Tax Relief Reconciliation Act of 2003″ was designed to stimulate the economy and give a tax break to primary producers and other industries that use of heavy vehicles as part of their business.

This poorly targeted tax applied to any vehicle weighing over 6000 pounds that was used for business-related activities. Savvy Doctors, lawyers, dentists, salespeople, CEOs and other business vehicle users began to acquire vehicles heavier than 6,000 pounds. Vehicles like the BMW X5, Dodge Ram, and Hummer H1. The tax breaks were up to $106,000 in the year of purchase on vehicles that cost $50,000-$110,000.

Something had to be done to better target the tax break for the intended beneficiaries.

Hummer tax break gets hammered

In the wake of mounting criticism, on both tax policy and environmental grounds, lawmakers have narrowed the SUV loophole. Now the $100,000 write-off applies only to vehicles weighing 14,000 pounds or more. This protects most business-use heavy trucks or vans, such as refrigerated trucks. If you drive something smaller for your business, as soon as President Bush signs this new bill into law you’ll be able to expense only $25,000 of the amount it cost.

Brilliant! Don’t proscribe types of vehicles or limit the tax break to specific industries. Double the weight limit and add some! That’ll stop those pesky executives from filling up the roads with truck-o-sauruses.

The changed conditions are simply a challenge requiring innovative thought and a mountain of steel.

Weighing in at a taxation-friendly 14,500 pounds I’d like to introduce you to the International 7300 CXT. (thanks Alastair for the link)

Problem solved.