NMMA forms opposition to bill ending tax breaks

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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.

Click here for more and find a sample letter that can be sent to your representative in Congress.

Comments

12 comments on “NMMA forms opposition to bill ending tax breaks

  1. Terry Zaleski

    I’m sorry but in these troubled economic times everybody needs to step up..The “me me me” attitude of special interest groups has lead to a lot of the problems we have today.. Lets grow up, be mature, set an example and pay our dues.. Everyone I talk to says the same thing.. “that special interest all act like spoiled children” So lets show the rest who the adults realy are.

  2. Michael Kovacs, CPA

    Couldn’t agree more. A key piece of tax law that is missing from both the bill and this letter is that home mortgage interest deductions are limited to $1 million of principal including the taxpayer’s residence and second home. When I think of a “luxury yacht” it generally costs more than $1M. When I think of a “luxury yacht owner” they generally live in a home with a value of more than $1M. The really big boats aren’t getting the deduction to begin with.

  3. Gordon

    I was a marine dealer before retiring, I now collect social security. “We” the Republic of the United States have a problem, a BIG problem…It’s called over spending and to much debt. We have to stop thinking of only our selves, or this tax break removal won’t make a difference, with the collapse of the economy. The “not in my back yard” syndrome is alive and well. I would be willing to take a 10% cut in benefits if the cut was across the board. Including ALL government agencies and employees. Hard times are coming my friends if we don’t stop thinking of only ourselves.
    Thank you my friends, may you have a good season.

  4. Mike Joyce

    If people in government learn nothing else they should know by now that rich people didn’t get rich by getting “got” by stupid politicians. Sounds great in the newspapers just like the luxury tax sounded great and it will hammer the middle class just like it always does. It would be a joke if it were not for the thousands of people who will lose their jobs in the marine industry in this latest government screw up. When they finally eliminate all deductions (certainly not in our lifetime!) then by all means put boats in the pot with everything else. If you people in Congress need a killer soundbite then go audit the Federal Reserve and look at all the criminal acts done during the TARP bailout that are starting to leak out now.

  5. Thomas Dammirch

    If Congress wants to eliminate all deductions or all deductions for interest on second homes, have at it. But there is no logic to singling out boats. It is middle class Americans who probably couldn’t afford their boat without the interest deduction that will be penalized. And, it is middle class workers who build and service boats who will be penalized. As Mr. Kovacs pointed out, the wealthy likely don’t even get this deduction because they have a second home too, they already have a million dollar mortgage, or if their income is over $250,000 they get hit with the AMT. We do need to cut spending and tax breaks, but let’s just be fair. Singling out boat owners is not fair.

  6. 34 years and counting

    There are probably not too many industries that get as hammered as the marine industry. Fuel crisis, recessions and luxury taxes have all done damage to our us. We don’t mind paying our fair share Terry but it should be “shared” pain. Do you think rich people are just putting their money under their mattresses? They are buying goods from “all” of us. Yes we have a serious debt problem and it will take some time to correct. Let’s use some common sense with the scalpel.

  7. John Ennis

    Here we go again into NIMBY land. This is not going to the rich from buying boats. It’s effect wll be similar to a fly biting an elephant and asking if it huirts

  8. Doug

    Intresting now takeing 2 home deduction away from boating.Conneticut wants a luxury tax on boats.Car industry get cash for clunkers helping the auto industry.I dont know marine associations are doing? Doug

  9. julia & charles miller

    Once again middle class America is getting nailed. In Florida, sales tax is capped at 25,000 on boats. so if one is wealthy enough to purchase a boat of that value the tax is capped at $25,000. If one buys a boat for $100,000 or so by God one has to pay all the sales tax that is due.
    If they want to go after second homes let’s include ALL shapes and sizes.
    (I realize I’m mixing sales tax and income tax but it’s all tax)

  10. vissionquest

    In what rational mind is there a believe that secondary homes are different than”yachts” as far as taxes go. I see little proplem in treating them the same, but if there is a distinction, a yacht creates more jobs and business than a second home does and should be taxed less. The sponsers of this bill live in states with a high number of vacation homes and low number of “yachts” being used as a secondary home. Lets tie the bill to something that removes subsidies for corn farmers and see how they do.

  11. Glenn McCarthy

    This deduction currently is available to RV’s, Boats, and 2nd Homes (vacation homes). People who boat commonly use their boat to recreate and don’t have RV’s or 2nd homes. And the same applies to those who have a vacation home or RV, they don’t own a boat because their time is taken doing the vacation home maintenance and RV activities.

    This is discrimination simply due to the nature of boating being “elite” but it is no different in eliteism compared to an RV or a vacation home.

    More misguided, and defective politicians who can’t seem to resolve the real problems facing this country.

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