Senate Version of Tax Reform Bill Passes with 100 Percent Floor Plan Interest Deductibility
The U.S. Senate has passed the "Tax Cuts and Jobs Act” that included a NADA and RVDA supported amendment to preserve 100 percent interest deductibility on floor plan loans. This amendment was offered by Sen. Rand Paul (R-KY) and the bill passed on Dec. 2.
The Senate tax bill now recognizes that floor plan loans used to finance high-cost inventory such as cars, RVs, boats, and farm equipment require the ability to deduct interest expense. The earlier version of the bill passed out of a Senate committee put dealers with high-cost inventory at risk of paying higher taxes, even when the dealership does not show a profit.
Sen. Paul's leadership on this issue ensured that 100 percent floor plan interest deductibility was included in the Senate’s tax bill. Full interest deductibility on floor plan loans will help protect auto, RV, and boat sales, jobs as well as tax revenue for state and local governments.
Both the House and Senate tax reform bills include nearly identical floor plan interest deductibility provisions. The bills now move to a House-Senate conference committee to reconcile their differences before both houses of Congress vote on final passage. RVDA will keep dealers advised as the tax bill moves forward in Congress. President Trump has indicated that he would like to sign a tax reform bill before Christmas.