(Updates with expanded vehicle weight standard in paragraph 5 and SUV sales figures in paragraph 7)
By John Crawley
WASHINGTON, May 23 (Reuters) - Congress on Friday substantially widened a tax break that has been used by small businesses as an incentive to purchase the largest sport utility vehicles and pickup trucks.
Supporters including President George W. Bush said the business equipment tax break, which was quadrupled to $100,000 in the $350 billion tax cut bill that narrowly cleared Congress, is good for the economy.
But critics called it a loophole that unfairly benefits the auto industry and provides an unnecessary perk to business people who do not need, but want to buy the largest, most-polluting and fuel hungry SUVs.
"People will now do it because they are economically rational enough to go for the tax break," said David Nemtzow, president of the Alliance to Save Energy.
Even the auto industry was not behind the three-year initiative, saying it is too narrow. The deduction applies to vehicles that weigh more than 6,000 pounds when fully loaded with passengers and cargo, which includes those classified as trucks for tax purposes.
While the provision would exclude some of the most popular pickups and SUVs, it would cover dozens of other models, including the Chevrolet Suburban , the Hummer H-1 and the Ford F-250 pickup and Expedition SUV.
The top three selling vehicles in the United States through April were pickup trucks. According to Ward's Automotive Reports, large SUVs account for about 5.3 percent of the U.S. market.
The incentive includes additional tax savings for depreciation and would allow businesses to write off the full cost of their vehicles in the first year of ownership.
Critics complain the provision widens a benefit originally intended for farmers and other truck-dependent businesses.
Auto manufacturers would prefer such a benefit cover a greater variety of vehicles.