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From the bloggers at the RV Industry Association:
RVs Move America Week is the time when RV industry colleagues come together to showcase the strength of the industry in meetings with federal policymakers across Capitol Hill, while collectively building a strategic road-map to help define future growth of the industry.
During advocacy meetings, members of the RV industry will be advocating for policies that directly affect the RV industry. One of the most important issues is floor plan interest deductibility.
Last minute changes to the 2017 tax reform bill, known as the Tax Cuts and Jobs Act (TCJA), led to a definition change in one section, inadvertently limiting the deductibility of RV trailer dealers’ floor plan costs.
Passed in December 2017, TCJA made changes to income tax rates for most individual tax brackets and reduced the income tax rate on corporations. However, the definition change in the interest section led to an unintended consequence that is currently disadvantaging one segment of the RV industry.
While US tax laws have allowed businesses to deduct the interest they pay on inventory, the TCJA reduced this 100 percent deduction of floor plan interest to 30 percent as a partial “pay-for” for other provisions in the bill.
In the end, the final legislation preserved the 100% deduction for floor plan financing for “motor vehicle” dealers. However, a change in how “motor vehicle” is defined has led to the current situation where dealers of towable RVs are capped at a 30 percent deduction of floor plan interest.
The full blog can be found at www.rvia.org.