The marine industry is continuing its fight against a change in tax laws that would prevent boat owners from writing off yachts as second homes.
Soundings Trade Only reported that the Ending Subsidies for Yachts Act, barring the deduction for new mortgages on boats, is pushed by two Democrats in the Republican-led House, Reps. Mike Quigley of Illinois and Tim Walz of Minnesota. They highlight estimates from the bipartisan Joint Committee on Taxation that suggest savings of more than $150 million over 10 years, a number that would grow as the deduction is phased out, according to a Bloomberg News report.
The interest deduction for second homes, with an estimated cost of $8 billion a year, is part of the broader mortgage interest deduction, the future of which is up for debate. The break for boats is a tiny proportion of the second-home total.
Taxpayers can deduct interest on as much as $1.1 million in mortgages on two homes: a “main home,” where they live most of the time, and a second home. The IRS does not require them to say how much interest is for the first or second home and the agency does not have data on the cost of the boating break.
The deduction is mostly used by “middle-class” boaters because the wealthy already tend to have multiple homes on land, National Marine Manufacturers Association director of regulatory and legal affairs Nicole Vasilaros told the news service.