Stimulus bill and your RV tax credit - be careful

March 2, 11:50 AMRV Travel ExaminerKeith Bennett

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A key provision of the bill grants a federal tax deduction applicable on the first $49,500 paid for a new car, truck or motor home. But language was stripped from the bill that would have extended that tax break to non-motorized trailers and fifth wheels. Those units make up 85 percent of the industry's annual sales. The Recreation Vehicle Industry Association estimates nearly 8 million U.S. households own an RV.  Many RVers who have heard parts of the news assume that the credit is for all RV's, not so, be careful if you are in the market for that new RV and using the tax credit as financial justification.

Here is a further update from RVDA's Mike Molino - (Feb. 27, 2009)

Here is a quick update on what’s happening in Washington, as the industry works together to try to improve the RV market.  Congressman Joe Donnelly of Indiana (Elkhart) was the leader in getting the motor-home sales tax deduction included in the stimulus package. The American Recreation Coalition’s Executive Committee (RVIA’s Richard Coon, the National Marine Manufacturers Association’s Thom Dammrich, ARC’s Derrick Crandall, and myself) met with Donnelly this week. He is very tuned in to the White House. He rode on the President’s first Air Force One flight. As you may realize, that trip had an RV connection, because they flew -to Elkhart. Donnelly is an industry supporter and, for a second termer, has a lot of “juice.”

The congressman also apologized for not getting the industry the full benefit from the sales tax credit. Donnelly said that at one time he had both motorized and towables in the stimulus bill. The Senate changed the language during the joint mark up of the bill so that it includes only motorized. He said he would lead a follow up effort to get towables included the next chance they get. He expects a second stimulus later in the Spring.
 

By the way, too few are celebrating our greatest (in my opinion) recent achievement in making RVs affordable. We retained the Mortgage Interest Deduction for RV loans. There was some doubt at one point. The auto industry wanted to include car loan interest as deductible and got rejected. We were holding our breath that the Congress would cut off our deduction. We kept it. That’s worth a lot more than sales tax credit. There is a move in Washington that could limit this deduction for certain income groups, so the industry must be vigilant in this area.
Thanks for your support.
Mike Molino, CAE
RVDA President

We will keep you informed as we get additional information.  It goes without saying that you should consult your tax adviser for what is best in your unique situation.

Happy Camping

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