Reps. Jackie Walorski, R-Ind., and Dina Titus, D-Nev., introduced bipartisan legislation Wednesday to equalize the tax breaks for different types of RVs, including travel trailers and campers.
The Travel Trailer and Camper Tax Parity Act (H.R. 3552) would fix a provision in the Tax Code to restore the full deductibility of inventory financing interest for all types of RVs, including motorhomes, travel trailers and campers, as Congress originally intended, according to the bill’s proponents. Under the Tax Cuts and Jobs of 2017, a deduction for interest paid on RV dealer inventory inadvertently excluded non-motorized travel trailers. The House and Senate versions of the legislation specifically intended to include towable RVs as motor vehicles, but the final version of the TCJA simplified the definition of motor vehicles. That means the full tax exemption now only applies to RV motorhomes, putting the RV travel trailer industry at a disadvantage and forcing larger dealers to use different accounting rules for trailers and motorhomes. Around 88 percent of RVs sold are travel trailers, according to the RV Industry Association.
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The legislation is being introduced at a time when travel is expected to significantly increase this Memorial Day weekend compared to last year. Thanks to COVID-19 vaccines, more Americans are making plans to travel this year, and airlines are reporting increases in bookings for the holiday weekend.