Section 179 Tax Deduction for Business Owners in Texas

Note that because many vehicles can serve business and personal function both, the rules for business vehicle deductions are always evolving, and can be complicated. It’s easier to list the typical vehicles that will generally qualify for a full section 179 deduction, and then discuss the rules for other vehicles.

Many “work vehicles” that, by their nature, are not likely to be used for personal purposes will usually always qualify for full Section 179 deduction. This includes the following vehicles:

• Vehicles that can seat nine-plus passengers behind the driver’s seat (i.e.: Hotel / Airport shuttle vans, etc.).

• Vehicles with: (1) a fully-enclosed driver’s compartment / cargo area, (2) no seating at all behind the driver’s seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. In other words, a classic cargo van.

• Heavy construction equipment will qualify for the Section 179 deduction, as will forklifts and similar.

• Typical “over-the-road” Tractor Trailers will qualify.

WHAT ARE THE LIMITS ON TYPICAL PASSENGER VEHICLES USED FOR BUSINESS?

For passenger vehicles, trucks, and vans (not meeting the guidelines below), that are used more than 50% in a qualified business use, the total deduction is limited to up to $18,200 per vehicle.

Exceptions include the following vehicles:

• Ambulance or hearses used specifically in your business

• Taxis, transport vans, and other vehicles used to specifically transport people or property for hire.

• Qualified non-personal use vehicles specifically modified for business (e.g. work van without seating behind driver, permanent shelving installed, and exterior painted with company’s name)

• Other heavy “non-SUV” vehicles and trucks with a cargo area at least six feet in interior length (this area must not be easily accessible from the passenger area.) To give an example, many pickups with full-sized cargo beds will qualify for a full deduction (although some “extended cab” pickups may have beds that are too small to qualify).