Sens. Joni Ernst (R-Iowa) and Angus King (I-Maine) on Tuesday introduced legislation to change the tax code affecting RV dealerships.
The bill, Senate bill 3345, will change the 2017 tax reform legislation to provide full deductibility of floorplan finance interest for towable RVs. The 2017 legislation provided full deductibility for “motor vehicles,” a federal definition that included motorized RVs but not towables.
“This commonsense bill would help this industry continue to thrive,” Ernst said, “by ensuring towable RV and camper dealers are not put at a disadvantage.”
Ernst and King are members of the Senate RV Caucus. Ernst is the Senate chairman of the caucus.
The new legislation will affect RV dealers who have more than $25 million in annual sales, whose net interest deduction for towable RVs is limited to 30% of earnings before interest, taxes, depreciation, amortization (EBIDTA) and depletion.
RVIA President and CEO Craig Kirby said, “We commend Sens. Ernst and King for their bipartisan effort in reintroducing the RV tax parity legislation. This crucial legislation addresses a now long-standing issue where travel trailers were mistakenly removed from the definition of motor vehicles.”
RVIA estimated 40% of money spent at an RV retail establishment is generated by a dealer with $25 million or more in annual sales. Dealers selling boats, motorhomes, conversion vans, motorcycles and automobiles can fully deduct interest paid on their inventory floorplans.
All 50 states define and regulate towable RVs as motor vehicles.
“The day I left office as governor in 2003, my wife and I departed with our two children in a 40-foot RV for the next 5½ to set forth on a great adventure,” King said. “On that trip, we participated in a tradition going back generations and witnessed the majesty of America through our windshield. This bill seeks to level the playing field for travelers in the tax code, whether they choose to purchase a motorized or non-motorized RV.”
RV manufacturers and dealers expressed support for the tax legislation change. Chad Reece, Winnebago Industries’ vice president for government and industry relations, said Winnebago encourages Congress to support the legislation and act quickly. RVDA President Phil Ingrassia said the legislation will ensure RV travel trailer dealers remain competitive with other types of recreation products.
For more, email RVIA Senior Manager of Government Affairs Samantha Rocci at [email protected].
