Bill Introduced to Fix Unfair Floor Plan Deductibility Issue – RVBusiness – Breaking RV Industry News

Joni Ernst

Angus King

Senators Joni Ernst (R-IA) and Angus King (I-ME) Tuesday introduced a fix for the critical floor plan deductibility issue affecting the RV industry, according to a release from the RV Industry Association (RVIA). The bill, S.3345, 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.

“The RV industry employs thousands of Iowans and contributes billions each year to the U.S. economy,” said Ernst, Senate RV Caucus Chairperson. “This commonsense bill would help this industry continue to thrive by ensuring towable RV and camper dealers are not put at a disadvantage.”

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.

“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 five and a half months to set forth on a great adventure,” said King, Senate RV Caucus member. “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. The Tax Cuts and Jobs Act created a false distinction between the two, and this bill seeks to restore fairness in the tax code by granting them the same treatment.”

Craig Kirby

“We commend Senators Ernst and King for their bipartisan effort in reintroducing the RV tax parity legislation,” said Craig Kirby, RV Industry Association President & CEO. “This crucial legislation addresses a now long-standing issue where travel trailers were mistakenly removed from the definition of motor vehicles. This commonsense fix will help RV dealers across the country get more Americans outdoors to experience an active outdoor lifestyle and all the great outdoors has to offer.”

Chad Reece

“We’re pleased to see Senators Joni Ernst (R-IA) and Angus King (I-ME) introduce S. 3345. The new bill corrects an error in tax legislation from 2017 that inadvertently removed RV travel trailers from the definition of ‘motor vehicle’ for the purposes of business interest cost deductibility. The current situation is problematic for RV dealers, a critical partner in the RV industry, who must adopt different accounting rules for the travel trailers and motorhomes they inventory and sell on their lots,” said Chad Reece, Winnebago Industries Vice President for Government and Industry Relations. “We encourage Congress to support the Senators’ legislation and act quickly to ensure that towed RVs are included in the tax law’s interest financing provisions. The RV industry plays an important role in connecting Americans to the great outdoors and is an important driver of economic growth in the outdoor industry. Any tax provision treating travel trailers differently from motorized RVs only hampers this continued growth.”

Phil Ingrassia

RV dealers support the change as well. “This bill provides much-needed relief to RV dealerships burdened by a Congressional drafting error five years ago. By allowing dealers to fully deduct the interest on their inventory financing for all units, the Ernst-King legislation will ensure that RV travel trailer dealers are able to remain competitive with other types of recreation products, encourage growth, and foster a thriving marketplace for RV enthusiasts,” added Phil Ingrassia, President of the RV Dealers Association.

For more information, contact RV Industry Association Senior Manager of Government Affairs Samantha Rocci at [email protected].

Source: https://rvbusiness.com/bill-introduced-to-fix-unfair-floor-plan-deductibility-issue/