Boating industry advocates say an elimination of the deduction would hurt sales. They point to the industry’s downturn that followed a 10 percent excise tax on boats priced above $100,000 that was started in 1991 and repealed in 1993.
‘Extremely Damaging’
“It could be extremely damaging,” said Chris Berkeley, a loan officer with Intercoastal Financial Group in Fort Pierce, Florida.
The deduction is mostly used by “middle-class” boaters because the wealthy already tend to have multiple homes on land, Vasilaros said. The average boat loan is for $49,000 and more than three-quarters of owners have annual household incomes of less than $100,000, she said, adding that the industry estimates about 5 percent of the 12 million boats registered in the U.S. qualify for the deduction.
The boat manufacturers don’t have data on how many boat owners use the deduction, or their income level, Vasilaros said.
In Webb’s case, the physician said that although he’s used the deduction on previous vessels, he doesn’t on his current one because his primary home mortgage already exceeds the $1.1 million limit. He plans to get a smaller home, then use the tax break for his boat.
Senator Chafee
An effort to do away with the boat provision in 1987 was pushed back in part by then-U.S. Senator John Chafee of Rhode Island, a top shipmaking state.
“If this whole deduction is going to be eliminated for all players, we would not be happy about it,” Vasilaros said. “But it would at least be fair.”
Since 2001, the boat manufacturers association has contributed roughly $850,000 to federal candidates, according to the Center for Responsive Politics in Washington. Brunswick’s political action committee gave about $330,000 to federal candidates during that period.