When a Montana judge ordered Hyundai to pay $73 million in punitive damages last year to the families of two teenagers killed in a car crash, she found that the South Korean automaker had “recklessly” ignored scores of warnings over more than a decade about the steering defect blamed for the accident.

But even if Hyundai is eventually forced to pay the full amount of the damages, the punishment could be substantially reduced through a tax loophole that permits the company to save millions of dollars by deducting any court-ordered punitive damages as an ordinary business expense. The result, critics say, is that taxpayers are in effect subsidizing corporate misconduct.

“This tax loophole allows corporations to wreak havoc and then write it off as a cost of doing business,” said Senator Patrick Leahy, Democrat of Vermont, who introduced a bill last month to outlaw the deductibility of punitive damages like the ones imposed on Hyundai.

“That undermines the whole point of punitive damages.”

Carmakers are far from the only companies that can exploit loopholes that allow them to lower their tax bill by deducting fines, forfeitures and other payments related to wrongdoing. Although the tax law forbids deductions for criminal fines and penalties owed to the government, other kinds of payments — to compensate victims or correct damages — are eligible for a tax deduction.