RV Trade Associations Voice Support for House and Senate Bills to Fix Floor Plan Deductibility
Two bills have been introduced to fix a problem in the tax reform law approved by Congress and signed by President Trump in 2018.
U.S. House Rep. Tom Emmer (R-MN-6) and Representative Jackie Walorski (R-IN-2), Co-Chair of the House RV Caucus, are sponsoring new legislation to ensure that towable RVs are included in the floor plan interest financing deductibility provisions of the Tax Cuts and Job Act. U.S. Senator Joe Donnelly (D-IN), and co-chair of RV Caucus, introduced similar legislation in the Senate.
The Travel Trailer and Camper Technical Corrections Act (H.R.6969) and the Senate version (S.3600) were introduced with the strong support of the RV Industry Association and the national RV Dealers Association (RVDA). Last year’s tax reform bill provided much needed relief for small businesses, however, a last minute definition change in one section of the bill unintentionally resulted in effectively removing travel trailers from the definition of “motor vehicle” for the purposes of floor plan financing interest deductibility. Made during the House-Senate conference, this change unintentionally disadvantaged the RV travel trailer industry, by limiting the deductibility of some RV trailer dealers’ floor-plan costs.
The change impacts RV trailer dealers with more than $25 million in annual sales. Other dealers, including boats, motorhomes, conversion vans, motorcycles, and automobiles, can fully deduct interest paid on their inventory floor plans. However, RV trailer net interest deduction is limited to 30% 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.
"As the law is currently written, our RV dealers do not have the clarity and consistency they need, putting them at an unnecessary competitive disadvantage," said Congressman Emmer. "Since RV ownership continues to climb in Minnesota and across the country, it is imperative for Congress to immediately correct this oversight in the new tax law by passing this common-sense legislation."
“Indiana’s RV industry is essential to our state’s economic success with its more than 20,000 Hoosier workers," said Senator Donnelly. "This bill is a common sense fix that ensures both motorhomes and towable RVs are treated the same under the U.S. tax code.”
All 50 states define and regulate towable RVs and campers as Motor Vehicles. Through a small, technical fix, this bill ensures that motorized and non-motorized campers and travel trailers are treated the same under the U.S. tax code.
To contact your House member in Congress on this issue, click here. To contact your U.S. senator, click here.
RVDA and the RV Industry Association will keep members informed about the progress of H.R.6969.