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		Many big SUVs, like the Ford Excursion, can bring a big tax break.
		Wieck

He was able to write off $32,000 of the purchase price as a business expense.

"We really did it because it was a pretty hefty deduction," said Wizinsky, a health care consultant in Novi, Mich.

At the same time the tax code sanctions $30,000 write-offs for SUVs, prospective purchasers of a fuel-efficient hybrid vehicles qualify for a relatively small $4,000 tax credit.

A deal to extend similar tax credits to other environmentally friendly vehicles remains stalled in Congress.

It's all legal, and accountants and auto dealers are beginning to catch on.

"If it can save the consumer money, it's most likely that the dealer is going to know about it," said Andrew Beck, spokesman for the National Automobile Dealers Association. So far, there is no indication anyone in Congress wants to close the loophole. In fact, even higher depreciation tax breaks are on the table as part of the next round of tax cuts President Bush is planning.

The SUV tax break is becoming a staple of advice in the accounting world, as small-business owners such as Wizinsky are advised on ways to reduce end-of-the-year tax bills.

The size of the tax break has been growing under a schedule that became law in 1996. That's when Congress changed tax law to encourage business investment.

The scale of the tax break surprises accountants and tax experts, who feel bound to recommend SUVs and other light trucks to small-business clients.

"As I understood it, the reason (for the tax break) is to encourage business investment. That's what happened in my case," Wizinsky said.

At the same time, the tax break seems to contradict other national goals, such as improving vehicle fuel efficiency. A more economical fleet would aid two important national goals: reducing U.S. dependence on foreign oil and cutting greenhouse gasses.

The total cost of the loophole hasn't been calculated by the government, but Taxpayers for Common Sense, a non-partisan Washington watchdog group, estimates the SUV tax loophole could cost taxpayers between $840 million and $987 million for every 100,000 vehicles sold to businesses.

Aileen Roder, the group's program director, questioned whether there is a national need to subsidize sales of the largest light trucks — given Americans are buying SUVs in record numbers.

"This is one of the most lucrative breaks in the tax code," Roder said. "We're making it a fiscal no-brainer for businesses to buy giant SUVs."

To get an idea of the scale of the SUV tax break, a credit aimed at making it easier for small businesses to comply with the Americans with Disabilities Act costs $525 million per 100,000 uses.

A tax credit to reimburse teachers for classroom supplies annually costs the treasury $250 million per 100,000 uses.

And a provision allowing taxpayers to put up to $3,000 of tax-free earnings per year in private retirement accounts costs about $90 million per 100,000 taxpayers, according to Taxpayers for Common Sense.

There are long-standing limits on deductions to prevent taxpayers from subsidizing luxury-car purchases. But the limits do not apply to 38 light trucks that weigh 6,000 pounds or more, including the Cadillac Escalade, Dodge Durango, Excursion and Lincoln Navigator.

"We recognized it immediately and started informing people about how to use it," said James Jenkins, an accountant in Southfield. "It's just fabulous. My clients have been drooling."

Jenkins said five clients have used the loophole so far and five more are considering it. Jenkins even considered using the break, test-driving several SUVs.

"It makes you think very hard about it," Jenkins said. "But it was a 30% larger vehicle than I wanted."

Here's how the SUV tax break works:

Suppose a business owner wants to purchase a $45,000 luxury SUV for use in his business. He could write off $24,000 of the cost under section 179 of the tax code as accelerated depreciation. Then the buyer could write off additional depreciation of the remaining $21,000 under a five-year schedule — 20%, or $4,200, in the first year.

That's a total $28,200 tax write-off in the first year.

A more expensive large vehicle, like a Mercedes E-class SUV, a Range Rover or a BMW X5, would qualify for an even greater tax break.

The break for trucks got bigger this year under a schedule Congress adopted in 1996 when businesses could claim $17,500 in accelerated depreciation on equipment.

That lump sum increased to $20,000 last year. It went up to $24,000 this year. Next year and thereafter the deduction will be $25,000.

In 1996, Congress estimated the five-year cost of the tax break — for all business equipment — to be $1.6 billion. But luxury SUVs had barely cracked the market at that time.

IRS spokesman Bruce Friedland said the agency does not keep data on how much the tax break has cost. According to figures supplied by Autodata, there were 3.8 million of the 6,000-pound light truck models sold in 2001.

There are no estimates for how many of the vehicles that qualify were sold to businesses or how many businesses that bought vehicles took advantage of the deduction.

The code is not as generous for luxury cars.

A business owner wanting to purchase a Lincoln Town Car would have to live with a $7,660 deduction, one-fourth what he might save by buying a Lincoln Navigator. It would take more than 15 years to recoup the entire cost of the car.

After Sept. 10, 2004, the luxury-car write-off will revert to $3,060.

Tax experts say the light-truck tax loophole was originally targeted for farmers, so their working pickups would not be treated, for tax purposes, like luxury cars.

There was no mention of the need to stimulate the luxury truck market in the 1996 tax debate.

The House of Representatives attempted to make the SUV tax break even more generous as Congress debated an economic stimulus package in March.

Under the House plan, the cap for accelerated depreciation would have risen from $24,000 to $35,000. That effort died in negotiations with the Senate.