The $789.5 billion economic stimulus package that President Barack Obama is expected to sign next week will contain a tax break for buyers of new motorhomes.
According to the Recreation Vehicle Industry Association (RVIA), the news marks a “substantial legislative victory for the RV industry.”
Under the stimulus deal that Congress is likely to approve over the next few days, buyers of new cars, light trucks, motorhomes and motorcycles will be able to deduct the state sales and excise taxes from the purchase on their federal returns next year, the Baltimore Sun reported today (Feb. 13).
RVIA said that motorhomes are included in a tax provision that allows a portion of the sales or excise tax paid on the purchase of a new motorhome to be deducted. The deduction is attributable to taxes applying to the first $49,500 of the purchase price. Individuals with an adjusted gross income of up to $125,000 and joint filers with an adjusted gross income of up to $250,000 are eligible for the deduction.
RVIA actively lobbied for the tax break, which will save consumers an estimated $1.7 billion over 10 years. Dianne Farrell, RVIA vice president of government affairs, cited the efforts made by Sen. Evan Bayh. D-Ind., Rep. Joe Donnelly, D-Ind., and Sen. Ron Wyden, D-Ore.
“They and their staffs have worked tirelessly over the past several weeks to ensure that the RV industry is included in the stimulus legislation,” she said. “Their efforts on behalf of their constituents will make a real difference for the industry.”
Farrell added, “RVIA worked with government affairs consultants, member companies, state RV associations, RVDA and RV dealers to ensure that the RV industry received help from the economic stimulus package. We are thankful to all of our partners for their commitment to this effort.”
The addition to the American Recovery and Reinvestment Act became known as the “Mikulski Amendment,” drafted by Sen. Barbara A. Mikulski, D-Md. She scored a major legislative victory by getting her provision into the final deal, the Sun noted. It was one of only two so-called rifle-shot tax breaks supported by industry lobbies and approved by the Senate; the other was for homebuyers.
According to Mikulski’s office, a family that takes advantage of the new-car tax break will pay between $300 and $600 less in federal taxes next year.
It is an “above-the-line” deduction, which means it can be taken by anyone who owes federal income tax.