Donnelly Introduces Bill to Fix Tax Issue Harming RV Industry

Due to an error in the McConnell-Ryan tax law, towable RVs and campers were partly excluded from a tax deduction

Indianapolis, Ind. – U.S. Senator Donnelly, co-chair of the Senate Recreational Vehicle (RV) Caucus, recently introduced legislation to fix a last minute mistake in the 2017 McConnell-Ryan tax bill that significantly reduced a tax deduction used by RV trailer and camper dealers. As a result of the mistake, Hoosier RV dealers have faced higher inventory financing costs compared to other recreational dealers, such as those specializing in boats and motorhomes.

Shortly before the tax law was enacted, in an apparent effort to condense the relevant section, tax writers deleted the word “recreational vehicle” among others, and instead used the catch-all “self-propelled vehicle.” Travel trailers and campers are not self-propelled, and as a result, dealers are unable to fully utilize floor plan interest deductibility for non-motorized RVs.

Donnelly, co-chair of the Senate RV Caucus, said, “Indiana’s RV industry is essential to our state’s economic success with its more than 20,000 Hoosier workers. This bill is a common sense fix that ensures both motorhomes and towable RVs are treated the same under the U.S. tax code.”

According to a 2017 economic impact report, the Indiana RV Industry directly employs 22,469 workers across 481 businesses, including 94 RV dealerships. The direct economic output of the industry in Indiana is $6.8 billion.

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