There are a couple of bills floating around Washington that will change how we can write off vehicle costs. Whether or not anything will get passed before Congress calls it quits until after the election is anyone’s guess – but it’s good to know what could be coming your way, so you can plan accordingly.
The bill making all the noise this week is HR 6899. It’s offering up a tax credit (we like those even better than deductions!) of $3,000 to individuals and business owners who purchase a plug-in electric vehicle. As with the other hybrids the full amount of the credit is only available to the first 60,000 purchasers, and phases out during the 12-month period following the 60,000th purchase. There’s also an credit of up to $50,000 for gas stations that upgrade their facilities to include alternative fuel pumps, plus the ability for employers to reimburse employees up to $20 monthly for qualified bicycle-related expenses, where employees use bicycles to commute.
Then there’s another bill, HR 5351. This bill takes square aim at the “SUV” deduction. This is the allowance under Section 179 that allows purchasers to take an up-front write off up to $25,000 of the purchase price for vehicles weighing more than 6,000 lbs. Under this new bill, that loophole would close, and only vehicles weighing 14,000 lbs or more would qualify for a Section 179 deduction. There is an exemption though, for pick-up trucks or other vehicles with a 5-foot storage area, that is not directly reachable from the cab. Currently trucks need to have a 6-foot bed to qualify for the Section 179 deduction. This bill provides a $4,000 credit for plug-in electric vehicles, along with the same cycling commuter reimbursement.
It’s hard to say what will happen with these bills. There’s a lot of opposition to HR 6899, and HR 5351 has been kicking around since February. We’ll be keeping an eye on them to see if anything passes.