Assembly Saves SUV Tax Break
The Assembly on Thursday refused to eliminate a $40-million state tax break for businesses that buy three-ton and heavier sport-utility vehicles.
Lawmakers soundly defeated a bill that would have narrowed a state tax write-off worth up to $25,000 a year for those who buy the biggest SUVs for their businesses.
The bill, by Assemblyman Joe Nation (D-San Rafael), would have used the savings to give a $1,000 tax credit to people who buy electric and alternative-fuel vehicles. He called it nonsensical that California would give businesses a tax break for buying larger vehicles that consume more gasoline and create more air pollution.
But opponents called it a tax increase for business and “social engineering.” “Why don’t we let folks determine what vehicle they need, when they need it,” said Assemblyman Doug La Malfa, a Republican rice farmer from Northern California, “and stop this political correctness?”
The Assembly also passed a bill that would ban public schools in California from using “Redskins” as a sports team name and mascot. After two years of trying and failing to ban a much longer list of Native American mascot names including “Chiefs,” Indians” and “Braves,” Assemblywoman Jackie Goldberg (D-Los Angeles) narrowed her bill to a single term that she called shameful and dehumanizing.
If passed by the Senate and signed by the governor, the ban would take effect in 2006 and affect five public high schools in Northern and Central California: Calaveras, Chowchilla Union, Colusa, Gustine and Tulare Union.
“I think it would still be met with quite a bit of resistance,” said Robert Hulbert, an alumnus and principal of Colusa High School, about 60 miles north of Sacramento and home of the Redskins since the turn of the last century. “Obviously, if it becomes law, we’re going to become adherent to the law.”
The mascot bill, AB 858, passed 43 to 20. All opponents were Republicans except Assemblywoman Carol Liu (D-La Canada-Flintridge). It goes next to the Senate.
Republicans attacked Nation’s SUV bill as a tax increase on business owners, but many Democrats voted against it or did not vote. AB 848 was defeated 36 to 36, shy of the 41 necessary votes.
The bill would have ended a tax incentive that was adopted by California to mirror federal law. It allows business owners who buy sport-utility vehicles weighing more than 6,000 pounds to depreciate up to $25,000 of the purchase price in the first year they own it. Federal law allows a depreciation of up to $100,000 on such purchases.
The federal tax legislation was aimed at helping farmers, ranchers and other businesspeople who use light trucks or vans at work, Nation said, but it has been used by real estate agents, consultants and others as SUVs gained in popularity. His bill would have limited the $25,000 write-off to agricultural, timber and construction workers.
Under current law, Nation said, a person can buy a $50,000 Hummer H2 -- weighing 8,600 pounds -- and “write off the entire thing.” Even people who could use a passenger car in their jobs get the tax break, he said.
“You can be an agent to the stars, you can be a geologist, a music teacher, whatever,” Nation said. “You still receive that benefit.”
Assemblyman Dennis Mountjoy (R-Monrovia) accused him of trying “social engineering through tax legislation.”
“People in the state of California ought to be able to buy whatever kind of car they want to buy,” said Mountjoy, whose state-leased vehicle is a 6,600-pound Ford Expedition. Taxpayers pay up to $350 a month for vehicles leased by lawmakers, who must make up the difference if they choose a more expensive car or truck.
In all, 35 of the 80 Assembly members lease sport-utility vehicles, 20 of them heavy enough to qualify for the federal and state tax write-off.
Of the 20 Assembly members with the heaviest SUVs, only Edward “Ed” Chavez (D-La Puente) and George Nakano (D-Torrance) voted for Nation’s bill.
Eight other lawmakers either have or have ordered low-emission hybrid gas-and-electric vehicles, according to Assembly Executive Officer Jon Waldie.
Vehicles heavy enough to qualify for the tax break include the Cadillac Escalade, Chevrolet Suburban, Ford Econoline E350 Wagon, Ford Excursion and Lincoln Navigator.
