Floor Plan Deduction

Travel Trailer and Camper Tax Parity Act

Overview
Due to an inadvertent drafting error in 2017’s Tax Cuts and Jobs Act, for many years, RV dealers were unable to fully deduct the interest paid on travel trailer inventory. However, due to years of advocacy by the RV Industry Association and RV Dealers Association, legislation to fix this inequity, the bipartisan Travel Trailer and Camper Tax Parity Act, was included in the One Big Beautiful Bill Act. President Trump signed the legislation into law on July 1, 2025, correcting a long-standing error that greatly impacted the RV industry.

The Issue
Before this bill passed, while interest on motorhomes was fully deductible, travel trailers were only eligible for a 30 percent deduction, affecting 88% of RVs sold.  

This is because during negotiations over the language of the bill, the definition of “motor vehicle” in the federal tax code removed “recreation vehicles” as its own category in favor of a catch-all definition specifying “self-propelled vehicles.” This inadvertently excluded towable RVs, which make up between 85%-90% of RV sales. This long-awaited fix restores full deductibility of floor plan interest for non-motorized towable RVs by adding the following to the definition of "motor vehicle:”

• “Such term shall also include any trailer or camper which is designed to provide temporary living quarters for recreational, camping, or seasonal use and is designed to be towed by, or affixed to, a motor vehicle.”

Going Forward
The floor plan language is effective for the first tax year that begins January 1, 2025, for calendar-year taxpayers. After years of persistent advocacy, this is a major win that will support and strengthen the RV industry for many years ahead and is the result of the longtime advocacy of our members and action by dealers.

Thanks to the leadership of Ways and Means Chairman Jason Smith, Representatives Rudy Yakym and Dina Titus, Senators Joni Ernst, Angus King, Todd Young, and Jim Banks, and all the cosponsors, this critical fix for RV manufacturers and dealers is now in place.

The RV Industry Association appreciates the Trump Administration and Congress working to restore full deductibility of floor plan interest for non-motorized towable RVs.