RV owners are being encouraged to support the Travel Trailer and Camper Tax Parity Act.
By Samantha Rocci, Director, Federal Affairs, RV Industry Association,
& Brett Richardson, Director of Legal & Regulatory Affairs, RV Dealers Association
May 2024
Did you know that under current tax laws, the interest paid on RV dealer inventory loans is only fully deductible for motorhomes, leaving RV travel trailers at a significant disadvantage? This means that dealers specializing in or selling nonmotorized RVs (travel trailers) are limited to only a 30 percent tax deduction on their inventory. This situation impacts around 85 percent of RVs sold — the very ones that might be on your wish list. The current setup affects the options available to consumers like you.
WHAT’S BEING DONE
But here’s the good news: There’s bipartisan support in the House and Senate to fix this. Representatives Rudy Yakym (R-Indiana) and Dina Titus (D-Nevada) introduced H.R. 3624, and Senators Joni Ernst (R-Iowa) and Angus King (I-Maine) introduced S. 3345. These bills would fix this error, ensuring that towable RVs, like the ones you might be interested in, get fair treatment in terms of floor plan interest financing.
WHY IT MATTERS TO YOU
RV trailers are classified as motor vehicles under state and federal laws, designed for short-term camping. It’s important to level the playing field for their financing. In 2023 alone, larger RV dealers paid an estimated additional $100 million in taxes due to these limitations, impacting the variety of vehicles available to you as a consumer. Retail RV prices have increased by 15 percent to 30 percent since 2020. While not all of this increase can be attributed to higher taxes paid by impacted dealers, a higher, disparate tax burden on these businesses contributes to the increase in RV prices. By supporting this legislation, you can contribute to fairer pricing, more choices, and better value for your RV.
YOUR CALL TO ACTION
You have the power to make a difference. Support the Travel Trailer and Camper Tax Parity Act (H.R. 3624 and S. 3345), which aims to include towable RVs in the floor plan interest financing deductions. This correction promotes fairness, strengthens RV trailer dealers’ competitiveness, supports the growth of the RV industry, and ultimately gives you more choices and better value. If you want to lend your voice to this cause, get in touch with Samantha Rocci, director of Federal Affairs for the RV Industry Association (floorplan@rvia.org), and let your members of Congress know you support this crucial legislation. Together, we can make a positive change in the RV industry!
MOTOR VEHICLE DEFINITION IN FLOOR PLAN INTEREST PROVISIONS — IRS CODE 163(j)
Section 3301 (amends Section 163(j) of IRS Code), from page 229.
“(C) MOTOR VEHICLE.—The term ‘motor vehicle’ means a motor vehicle that is any of the following:
“(i) An automobile.
“(ii) A truck.
“(iii) A recreational vehicle.
“(iv) A motorcycle.
“(v) A boat.
“(vi) Farm machinery or equipment.
“(vii) Construction machinery or equipment.”
Senate-passed language:
Section 13311 (amends Section 163(j) of IRS Code), from pages 191-192.
“(C) MOTOR VEHICLE.—The term ‘motor vehicle’ means a motor vehicle that is any of the following:
“(i) An automobile.
“(ii) A truck.
“(iii) A recreational vehicle.
“(iv) A motorcycle.
“(v) Any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road.
“(vi) A boat.
“(vii) Farm machinery or equipment.”
Section 13301 (amends Section 163(j) of IRS Code), from pages 178-179.
“(C) MOTOR VEHICLE.—The term ‘motor vehicle’ means a motor vehicle that is any of the following:
“(i) Any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road.
“(ii) A boat.
“(viii) Farm machinery or equipment.”
Joint Explanatory Statement of Conference Agreement, from Page 392: “In addition, for purposes of defining floor plan financing, the conference agreement modifies the definition of motor vehicle by deleting the specific references to an automobile, a truck, a recreational vehicle, and a motorcycle because those terms are encompassed in the phrase, “any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road,” which was also part of the definition in the Senate amendment.” (Emphasis added.)