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While the Obama Administration is pushing for a 62-mpg CAFE regulation, promoting small, green cars, the IRS has a plan to get owners of businesses behind the wheel of a gas guzzling behemoth.
In what appears to be a plan to stimulate the economy, the IRS has announced new tax rules for companies that make buying a big truck a more economically feasible decision. New tax deduction rules improve the more you spend, and even go up if you’re truck of choice weighs over 6,000 lbs.
So if you are looking at buying a big truck, like a Cadillac Escalade or Infiniti QX56 (above), the new rules will let you deduct 100% of the car’s value in the first year (subject to a personal use disallowance – essentially meaning it has to be used exclusively for work). The amount of depreciation that can be deducted also varies on the cost of the vehicle, with more expensive machines paired with much more significant deductions. According to figures in the Wall Street Journal, for any vehicle under 6,000 lbs and the first year depreciation deduction is $11,060, but the deduction for following years is much more significant for more expensive vehicle, with a $4,900 second year deduction for a vehicle over $31,000 compared to a $3,200 deduction for a vehicle costing under $20,000.
While this move by the IRS does seem to go against a push for fuel efficient cars by the government, there is an economic policy behind it, helping to promote purchases of large trucks by businesses. The new rules apply to vehicles bought after Sept.8 2010 and up until Jan. 1, 2012.
See a list of 2011 model year trucks that apply for the bonus credit, as compiled by GMI, after the jump: