Will grvw still be enough to qualify for business tax deduction?

[Northbenz]

Perhaps I missed it, but I did not see anything in the write-up as to whether the new M Class is the same gross vehicle weight or heavier in order to still qualify for the "Hummer Tax Deduction" available to small business. (This is the deduction that lets small business owners write off 25,000 dollars of the purchase price the first year - used to allow up to $75,000 or more the first year as a write off.)

Believe it or not this is a big consideration for the success of SUV's in today's competitive high end (i.e. high priced) market and it would be a real sales disaster if Mercedes overlooked its importance by down weighting the new M Class. My guess is if the new M Class comes in lighter (it barely qualified before) that some of the optional packages might be just heavy enough to make a difference, though not sure if it would really help since the IRS criteria is GRVW as opposed to actual weight.

[GregW / Oregon]

Northbenz - 1/13/2005 12:28 AM

Perhaps I missed it, but I did not see anything in the write-up as to whether the new M Class is the same gross vehicle weight or heavier in order to still qualify for the "Hummer Tax Deduction" available to small business. (This is the deduction that lets small business owners write off 25,000 dollars of the purchase price the first year - used to allow up to $75,000 or more the first year as a write off.)

Believe it or not this is a big consideration for the success of SUV's in today's competitive high end (i.e. high priced) market and it would be a real sales disaster if Mercedes overlooked its importance by down weighting the new M Class. My guess is if the new M Class comes in lighter (it barely qualified before) that some of the optional packages might be just heavy enough to make a difference, though not sure if it would really help since the IRS criteria is GRVW as opposed to actual weight.

The GVW is 2,830 kg = 6,239 lb. Isn't the requirement 6,000? Option packages do not increase GVW, they decrease the payload capacity (e.g., the 350 & 500 have same GVW, but payload capacity on the 500 is 40kg less than the 350).

[GregW / Oregon]

The tax break has new limits effectiv last October. From The IRS website:

Limit for sport utility and certain other vehicles.

For sport utility and certain other vehicles placed in service after October 22, 2004, the portion of the vehicle's cost taken into account in figuring your section 179 deduction is limited to $25,000. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is not subject to any of the passenger automobile limits explained under Depreciation Limits, later, and that is rated at no more than 14,000 pounds gross vehicle weight. However, the $25,000 limit does not apply to any vehicle:
1. Designed to have a seating capacity of more than nine persons behind the driver's seat,

2. Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or

3. That has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

[Northbenz]

Thanks. Yes, 6,000 was the magic number and thanks for confirming and expressing more clearly what I was attempting to say about options probably not helping Gross Vehicle Weight.