The National Marine Manufacturers Association is calling on the marine industry to tell Congress it opposes a bill that would remove the deductibility of interest on boats that are used as second homes.
“This bill, the ‘Ending Taxpayer Subsidies for Yachts Act,’ is both misnamed and wrongheaded and would accomplish nothing except putting American boatbuilders and other boating service providers out of work, precisely at a time when the industry has not recovered from the worst downturn since the Great Depression,” NMMA president Thom Dammrich said in a letter to industry professionals.
The bill, H.R. 1702, was introduced last week, and the NMMA says it appears to be based on the assumption that “yachts” are only owned by rich people and the American taxpayer is subsidizing their lifestyle. A yacht, by definition, is any vessel 26 feet or longer, and the deduction on interest expense is only applicable if the boat has a head, galley and sleeping berth.
“We know that a 26-footer is hardly what we all think of when we hear the word ‘yacht.’ Many a boat that can function as a second home on a lake or river fits the definition of ‘yacht.’ If land-sited dwellings and RVs can qualify for an interest deduction as a second home – and they can – why should a liveaboard boat be excluded simply because it floats on the water instead of being placed on land or driven down the highway,” Dammrich wrote.
This bill probably would hit a middle-income family that has its second home float on the water, rather than purchase a stationary home or a rolling home, he added.