The National Marine Manufacturers Association is praising pending tax legislation that Congress is set to send to President Trump’s desk shortly.
“While no legislation of this magnitude is ever perfect, the final package includes a number of provisions that can be considered ‘wins’ for marine manufacturers and the recreational boating industry,” wrote NMMA government affairs director Mike Pasko in a memo to members today.
Highlights include the absence of a new luxury tax on boat sales — a priority for the NMMA.
It also includes preservation of the second-home interest deduction for boats. the NMMA lobbied for parity with regard to the second-home interest deduction for boats.
“We didn’t want boats to be unfairly singled out and were successful in this regard,” Pasko wrote. Boats will still be eligible, but the reform package lowers the mortgage interest cap from $1 million to $750,000.
The NMMA also lobbied for lower corporate rates to ensure manufacturers can remain globally competitive and spur capital investment to create jobs and sustain economic growth, Pasko said. The new tax reform package lowers the corporate rate from 35 percent to a flat 21 percent, and repeals the corporate Alternative Minimum Tax.
Many NMMA members are organized as pass-throughs. Under current law, pass-throughs are taxed up to 39.6 percent. Under the new package, pass-throughs would be taxed up to 37 percent with a 20-percent deduction of qualified business income.
The new tax reform package also lowers individual tax rates, and nearly doubles the standard deduction, raising it to $12,000 for individuals and $24,000 for joint filers.
The estate tax wasn’t fully repealed, but doubles the exemption from $5.6 million to $11.2 million.
NMMA had asked for immediate expensing of capital investments so businesses could continue to reinvest. The final tax package allows for full and immediate expensing of short-lived capital investments for five years, and increases the expensing cap from $500,000 to $1 million.
The R&D tax credit is preserved under the package.