Starting off this New Year, it’s notable that consumer confidence keeps rolling and even the tax man reminds boating of favorable treatments.
First, if you haven’t been watching, this month has been a winner for our boat shows, likely helped by the continuing climb in consumer confidence. The Conference Board reported this week that the monthly Consumer Confidence Index jumped to 102.9 in January from a reading of 93.1 in December. It’s the strongest level since August 2007.
“Currently, consumer confidence is almost 30 percent higher this January compared to January of last year,” said Chris Christopher, director of consumer economics for forecaster IHS Global Insight. “The increased levels of consumer confidence are currently in sync with increased levels of consumer spending.
According to a report by Kevin G. Hall at McClatchy newspapers’ Washington bureau, economists at RDQ Economics have told investors: “In a strong signal that the expansion is feeling more normal, consumer confidence surged in January to the strongest level since August 2007. Importantly, the net jobs reading firmed by almost five points to the strongest level since February 2008. Six-month expectations for jobs and income also firmed.”
The rising confidence also indicates an expectation that hiring will be good this year. That, coupled with increasing wealth levels and lower gas prices putting hundreds of dollars back into consumer wallets, is all good news for boating.
Second, it’s time to remind dealership sales teams to make note of the favorable tax treatments for buyers as selling points during sales presentations.
Despite some calls in Congress to eliminate some advantageous benefits for boaters, Congress has continued them. The so-called “tax extenders” passed by Congress as the last session ended continue more than 50 tax programs ranging from possible boat-purchase interest deductions to accelerated business equipment write-offs.
More specifically, the very important Boat Loan Deduction Program remains. You’ll recall that some congressmen attempted to single out boaters by eliminating this deduction for boat owners while keeping it in place for second-home and recreational-vehicle owners.
Boating groups (NMMA, MRAA, BoatUS and others) rallied for a more equitable all-or-nothing approach when applying the deduction and won the day. Thus the benefit in which individuals with a secured boat loan can deduct mortgage interest paid on the loan from federal income taxes remains today, provided the boat qualifies as a second home with a galley, an installed head and sleeping berth.
Boat buyers can also enjoy the benefits of the Tax Increase Prevention Act of 2014 which continues a federal tax deduction for state sales taxes. Boat buyers can choose either the state sales tax deduction or state income tax deduction on their federal tax returns.
For dealers, the Bonus Depreciation advantage also remains, giving businesses an additional amount of deductible depreciation.
The bottom line is that, as the tax man comes around this spring, boating still enjoys some favorable treatments.