Rep. Yakym Backs RV Floor Plan Financing Fix in U.S. House – RVBusiness – Breaking RV Industry News

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WASHINGTON, D.C. – Congressman Rudy Yakym (IN-02) presented Thursday “commonsense legislative solutions and priorities” of Hoosiers in Indiana’s Second Congressional District at a House Ways and Means Committee Member Day Hearing. Among the topics of specific interest to the RV industry in his presentation was floor plan financing and an extension to the Generalized System of Preferences program.

“The Second District is the epicenter of the recreational vehicle industry. About 85% of RVs on the road come from Elkhart County and the surrounding area in my district. That’s why one of my top priorities is the passage of my bill, H.R. 3624, the Travel Trailer and Camper Tax Parity Act,” Yakym told members of the House Ways & Means Committee.

U.S. Rep. Rudy Yakym, center, talks with students during an RV Technical Institute (RVTI) training session. (file photo)

“The exemption of floor plan financing from interest deductibility changes in the Tax Cuts and Jobs Act solved an issue for many car and equipment dealerships across the country,” Yakym said. “However, it unintentionally left out non-motorized towable RVs, which are about 88% of RVs sold. This has forced RV dealers to maintain two separate sets of books – one for motorized and the other for non-motorized RVs. H.R. 3624 would correct this unintended consequence, allowing dealers to focus less on unnecessary paperwork and more on selling RVs to Americans looking to explore the natural beauty of our great nation.”

Yakym went on to say that the reauthorization of the Generalized System of Preferences, or GSP, program, was another priority of his office.

“As you might imagine, an RV has a unique, complex supply chain. The industry buys American whenever it can, but there are certain things it just can’t,” he said. “Lauan wood is an example of this. It is a tropical wood found almost exclusively in southeast Asia. Lauan is water-resistant and lightweight, which makes it ideal for the lining of an RV. It outperforms the other types of plywood on the market, providing superior durability and fuel economy. Lauan entered duty-free under GSP starting in 2019. However, since the program expired at the end of 2020, RV manufacturers resumed paying a million dollars a month in unnecessary tariffs. I support a long-term extension of GSP to help the RV manufacturers in my district, as well as other companies seeking to diversify their supply chains away from China.”

H.R. 3624: Travel Trailer and Camper Tax Parity Act

The bipartisan Travel Trailer and Camper Tax Parity Act (H.R. 3624), which was also introduced by U.S. Rep. Dina Titus (D-NV), would enable all RV dealers to fully deduct the interest on floor plan loans for non-motorized towable trailers, which account for 88% of RV sales.

Under the Tax Cuts and Jobs Act, which Congress passed in 2017, the tax exemption for interest paid on dealer inventory applies only to RV motorhomes, leaving towable RVs at a disadvantage. While motorhome interest remains fully deductible, towable RVs are now limited to a 30% deduction for dealers with $25 million or more in annual sales. This exclusion affects approximately 85% of RVs sold, which are non-motorized travel trailers and fifth-wheels, creating an unfair and complicated accounting situation for RV dealers. Furthermore, it is estimated this inequity is costing RV dealerships, as a whole, about $100 million annually.

The bill has the strong support of RV Dealers Association (RVDA) and RV Industry Association (RVIA). which have been working closely together to help correct this issue through legislative channels. The RV industry has been advocating for this fix to ensure that all segments of the RV industry are treated fairly by allowing floor plan financing interest charges on towable RVs to be a deductible expense, RVDA and RVIA officials said.

Similarly, Senator Joni Ernst (R-IA) and Senator Angus King (I-ME) introduced a companion measure last Congress, which also is expected to be reintroduced shortly.

Call to Action

RVDA and RVIA officials are asking its members to contact their representatives and encourage their support of the Travel Trailer and Camper Tax Parity Act (HR 3624), legislation.

Among the suggested talking points:

  • RV Trailers are Motor Vehicles. RV trailers are considered motor vehicles under state and federal motor vehicle laws. They are designed to provide temporary living quarters for short-term camping and comply with applicable motor vehicle regulations. Therefore, it is essential to create equity in the financing of RV inventory by including RV trailers in the deductibility provisions.
  • Current Negative RV Dealer Impact. According the U.S. Census Bureau, an estimated 550 U.S. RV dealers with more than 25,000 total employees are impacted by the tax disparity.  In 2023, it’s estimated that these dealers will pay an additional $100 million in taxes due to the inventory interest deduction limitation. This puts these dealers at a competitive disadvantage compared to other recreation equipment dealers, such as powersports and marine dealers, who can fully deduct interest on their inventory floor plans.
  • Current Negative Impact on Consumers. Retail RV prices have increased by 15% to 30% or more depending on the type of unit since 2020.  While not all the increase can be attributed to higher taxes paid by impacted dealers, a higher, disparate tax burden on these businesses contributes to the inflation and the increase in RV prices as indicated in the Fed’s RV Dealer Producer Price Index.
  • Initial Legislation Intended to Include RV Trailers. Both House and Senate tax legislation in 2017 intended to include RV trailers as motor vehicles in the floor plan interest exclusion. The consolidation of language aimed to simplify the provision but unintentionally excluded RV trailers due to confusion about the different types of RVs. Reinstating the original intent will rectify this unintended consequence.

Contact Congress

  • To contact your U.S. Senators  click here.
  • To contact your U.S. House Representative  click here.
  • To get information on the impact of the RV industry in your state click here.