This month, Senators Joni Ernst (R-IA) and Angus King (I-ME) introduced a fix for the critical floor plan deductibility issue affecting the RV industry. This is the Senate companion to the House bill introduced last month by Representatives Walorski and Titus.
The new bill will fix an error in the tax reform bill that inadvertently removed travel trailers from the definition of “motor vehicle” for the purposes of floor plan financing interest deductibility.
The proposed changes impact RV trailer dealers with more than $25 million in annual sales, whose net interest deduction is currently limited to 30 percent of earnings before interest, taxes, depreciation, amortization, and depletion. It is estimated that four out of every ten dollars spent at an RV retail establishment is generated by a dealer with $25 million or more in annual sales. Dealers of similar types of vehicles including boats, motorhomes, conversion vans, motorcycles and automobiles, can fully deduct interest paid on their inventory floor plans. Ensuring that RV trailer dealers can fully deduct their interest will ensure that RV trailers remain competitive with these other recreation products.
“We’re pleased Congress is acting to fix the quirk in current law that treats the towable trailer segment and motorized segment of the RV differently,” said RV Industry Association Senior Manager of Government Affairs Samantha Rocci. “We want to thank Senators Ernst and King for introducing the Travel Trailer and Camper Tax Parity Act. The legislation will ensure RV trailer dealers are able to remain competitive with other types of recreation products that are currently able to fully deduct interest paid on their inventory and help the RV industry continue its all-American success story.”
All 50 states define and regulate towable RVs and campers as motor vehicles. Though a small fix, this bill ensures that motorized and non-motorized campers and travel trailers are treated the same under the U.S. tax code.
For more information, contact Sam Rocci at email@example.com