Senate aims to end SUV loophole in US energy bill

WASHINGTON, Nov 17, 2003; Reuters treported that the Senate energy bill negotiators voted on Monday to close a loophole allowing small-business owners to deduct up to $100,000 from their taxes for buying a luxury sport utility vehicle.

Language eliminating the SUV loophole was inserted into the Senate's version of a broad energy bill, which also has $23.4 billion in tax breaks for oil, natural gas, coal and other energy sources.

The Senate version of the bill must be reconciled with the House language before a final bill is ready for both chambers to vote on. Lawmakers hope to complete all work by the end of this week.

Republican Sen. Don Nickles of Oklahoma offered the proposal to drop the tax break for doctors, lawyers, real estate agents and other business owners who buy expensive SUVs.

"There is enormous abuse of this provision. People are driving SUVs through this loophole," Nickles said.

The tax deduction of up to $100,000 dramatically cut the price of a Hummer H2, Land Rover, and other expensive, gas-guzzling SUVs for small business owners in the highest tax bracket.

The loophole was part of the $350 billion Bush tax cut enacted in May and applied to the purchase of a vehicle for business use weighing 6,000 pounds (2,722 kg) or more.