Last year’s tax reform bill provided much needed relief for small businesses. However, a last-minute definition change in one section of the bill unintentionally removed travel trailers from the definition of “motor vehicle” for the purposes of deducting floor plan interest for some dealers. This impacts RV trailer dealers with more than $25 million in annual sales.
New legislation, the Travel Trailer and Camper Technical Corrections Act (S.3600 & H.R.6969), has been introduced to ensure that towable RVs are included in the floor plan interest financing deductibility. Ask your Member of Congress to support the legislation today.
For more information and to contact your members of Congress, click here.
Other dealers, including boats, motorhomes, conversion vans, motorcycles and automobiles, can fully deduct interest paid on their inventory floor plans. However, RV trailer net interest deduction is 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.
A park model RV (also known as a recreational park trailer) is a trailer-type RV that is designed to provide temporary accommodation for recreation, camping or seasonal use. PMRVs are built on a single chassis, mounted on wheels and have a gross trailer area not exceeding 400 square feet in the set -up mode. PMRVs are most often used in recreational vehicle campgrounds. They may be owned by the campground and rented to guests, or they may be brought in and used exclusively by their owners on a site rented or leased from the campground. They can also be placed by their owners on private property. These RVs are used for recreational purposes only. They are not meant to be permanently affixed to the property, they do not improve property values in any way, and they are neither designed nor intended by their manufacturers to be used as permanent residences. Models range from $20,000 – $80,000.