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Senator proposes eliminating interest deduction on boats

The news came as a surprise. It was in a video to constituents in which Sen. Marco Rubio, R-Fla., proposed dumping the mortgage interest deduction for boats that qualify as a second home.

I say surprised, because I never expected my conservative senator from Florida, a state that builds and sells more boats than virtually any other, would subscribe to such an idea. Worse yet, he called boats “yachts.” Ouch, that sure indicates to me that he doesn’t have good information!

So, in an effort to bring some important facts to Rubio’s attention, I’ve fired off an email explaining why he should reconsider his idea. Here’s what I said:

  • Eliminating this deduction will hit middle-class Americans.
  • There are 17 million boats, not “yachts,” and 83 million boaters nationwide, with Florida the No. 1state in the county. I am a Florida boat owner.
  • The median household income for boat owners falls between $50,000 and $75,000. That’s me.
  • Seventy-five percent of all boat owners have a household income of less than $100,000. Me, too.
  • Consumer boat loans average $48,900, with 83 percent of those borrowers earning less than $250,000 per year. That’s me again.
  • The Treasury Department estimates eliminating the second home mortgage deduction for all qualifying residences (that includes vacation homes, RVs, boats) would save $10 billion annually. Any proposal that would target just boats, as you’ve proposed, would create only a small fraction of the savings. But its impact would be terrible: Manufacturing jobs will be lost by eliminating this deduction.
  • Elimination will have an immediate and direct impact on the marine industry and put manufacturing jobs in jeopardy for thousands of employees who build boats, engines and boat accessories, especially in Florida. My boat was built in Fort Pierce by Florida workers.
  • It’s a total misconception that eliminating this interest deduction would target “yachts” owned by rich people. A “yacht,” by definition, is any vessel that is 26 feet or longer and the deduction of interest is only applicable if the boat has a galley, sleeping berth and toilet.
  • Obviously, a 26-footer is not a rich man’s “yacht.” In fact, my boat is 28 feet, it qualifies for the deduction I take and that was a positive consideration when I was deciding whether to buy the boat.
  • A taxpayer can currently deduct qualified interest on his or her mortgage for a principal and secondary residence only up to a total value of $1.1 million. As a practical matter, those who own the very big boats we commonly think of when we say “yachts” have likely used up their allowable deduction on land-based dwellings. Thus, eliminating the deduction for a “yacht” won’t bring in any significant revenue.
  • This deduction is an important incentive for recreational boat sales and stimulates growth in the industry. If land-sited dwellings and my neighbor’s RVs can qualify for a mortgage deduction as a second home — and they do — why should my boat with basic living accommodations be excluded simply because it floats instead of placed on land or driven down the highway?

It’s notable that NMMA legislative director Jim Currie immediately headed to Sen. Rubio’s office this week. However, nothing will back up Currie’s efforts more than emails and calls from those of us in the industry at large.

So I encourage you, especially if you’re in Florida, to send your own email to Sen. Rubio. Just go to and click on Contact. There’s no way we should stand idly by while being singled out for a detrimental policy in the ongoing “fiscal cliff” debacle in D.C.

And since this is my last Dealer Outlook until after the upcoming holidays, I wish you a very Merry Christmas and a prosperous New Year.



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