Senators Introduce Bipartisan Bill to Restore Full Tax Deduction for Towable RV Dealer Financing

A bipartisan group of U.S. senators introduced legislation on April 7 to correct a tax code oversight affecting RV dealers nationwide. The bill, S. 1314, known as the Travel Trailer and Camper Tax Parity Act, aims to restore full deductibility of floor plan financing interest for RV dealers selling towable units.

Senators Joni Ernst (R-Iowa), Angus King (I-Maine), and Todd Young (R-Ind.) are leading the measure, with Senator Jim Banks (R-Ind.) joining as a cosponsor. The bill addresses an unintended consequence of the 2017 Tax Cuts and Jobs Act that excluded non-motorized trailers from full interest deduction eligibility.

Under current law, RV dealers with more than $29 million in annual sales are restricted in their ability to deduct interest, limited to 30% of earnings before interest, taxes, depreciation, amortization, and depletion. The proposed legislation would ensure that towable RVs receive the same treatment as other motor vehicles under the tax code.

Towable RVs, such as travel trailers, represent approximately 88% f all RV sales. Despite their classification as motor vehicles in all 50 states, they are not currently afforded the same tax benefits as motorhomes, boats, motorcycles, and similar recreational vehicles.

“This important legislation corrects a long-standing discrepancy that has unfairly impacted RV dealers,” said Michael Happe, Winnebago Industries president and CEO. “By restoring full deductibility of interest on financing for all RV units, S. 1314 levels the playing field and ensures that our dealers can compete on equal footing with other recreational product markets,” Happe added.

“We applaud Senators Ernst, King, and Young for their bipartisan leadership in reintroducing the RV tax parity bill,” Craig Kirby, president & CEO of the RV Industry Association (RVIA), said in a News and Insights report of RVIA. “This important legislation corrects a long-standing oversight that excluded travel trailers from the definition of motor vehicles.”

Kirby added that the bill would enable dealers “to stay competitive, drive industry growth, and continue to support the millions of Americans who love to get outside and embrace the RV lifestyle.”