WASHINGTON - The Internal Revenue Service (IRS) has finalized a rule that will permit contractors to write off significantly higher amounts of money spent on service vans and light trucks. The new rule will permit full expensing under Section 179 of the IRS tax code by exempting depreciation of vans and light trucks under Section 280F.

Last year, the IRS issued temporary rules regarding this section of the code, but the new rule will permanently exempt these vehicles and allow full expensing. Previously, light trucks and vans were treated the same as passenger automobiles and, therefore, small businesses were not permitted to treat these vehicles as business assets eligible for first year expensing.

"Because light trucks and vans make up a majority of fleets of HVACR contractors, this is fantastic news for our industry," stated Paul T. Stalknecht, president and CEO of the Air Conditioning Contractors of America (ACCA). "The change is going to place up to several thousands of dollars a year back in contractors' pockets due to reduction in tax liability."