Extra $25,000 Off A Model X Thanks To Tax Loophole?

Well, Fred Lambert has stumbled across a very interesting possibility. We all know that there are a ton of ridiculous tax loopholes out there. We also tend to figure that they don’t benefit “the good guys,” but sometimes they can.

Fred has pointed out that what is informally referred to as the “Hummer Tax Loophole” could benefit buyers of the Tesla Model X. The loophole used to allow for tax deductions up to $500,000 when you bought heavy vehicles or equipment (that would presumably be used for some industrial activities). It now just allows for $25,000, but that’s still a notable chunk of money.

I imagine you’re now curious how this applies to a Model X. Fred explains it like this: “Under the Section 179,  a SUV or Crossover, like the Model X, needs to have a gross vehicle weight rating (GVWR) of over 6,000 lbs to be eligible for the tax deduction. Tesla has yet to confirm the official GVWR of the Model X, but a little extrapolation from the specifications of the Model S, which is built on the same platform as the Model X, shows that Tesla’s new SUV could easily reach over 6,000 lbs.”

Fred gets into more details (check them out at the link above if interested), but here’s the snapshot story:

• GVWR for the Model S is 5,710 lbs
• Elon has stated that the Model X is ~10% heavier
• that makes the Model X GVWR 6,170 lbs (i.e., >6,000 lbs)

I’m not a tax specialist and can’t really say if this is the full story or if some critical detail is missing here, but the way it’s laid out, it looks like the Model X should be eligible.

Combine that with the $7,500 federal tax credit, and you’ve just chopped $32,500 off the price of a Model X. And if you make under $250,000 a year and live in California, you can bump that up to $35,000 — just enough to purchase your own Tesla Model 3 (with no incentives).

Image by Andrew Butko (CC BY-SA 3.0)