Senators Ernst, King, And Young Introduce Bill To Address RV Dealer Floor Plan Financing Challenges

On Monday, April 7th, Senators Joni Ernst (R-IN), Angus King (I-ME) and Todd Young (R-IN) introduced S. 1314, the Travel Trailer and Camper Tax Parity Act. Senator Jim Banks (R-IN) has already joined as a cosponsor. This bill fixes an inadvertent drafting error in the 2017 Tax Cuts and Jobs Act so that RV dealers can fully deduct the interest on their floor plan financing for all the RVs they sell, including non-motorized towable trailers, which account for 88% of RV sales.

The proposed changes impact RV trailer dealers with more than $29 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.

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.

“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.”

“We applaud Senators Ernst, King, and Young for their bipartisan leadership in reintroducing the RV tax parity bill,” said Craig Kirby, President & CEO of the RV Industry Association. “This important legislation corrects a long-standing oversight that excluded travel trailers from the definition of motor vehicles. By making this commonsense fix, RV dealers nationwide will be able to stay competitive, drive industry growth, and continue to support the millions of Americans who love to get outside and embrace the RV lifestyle.”

Please contact Samantha Rocci, Director of Federal Affairs, at srocci@rvia.org for more information.