US bill introduced to cut taxes on recreational boat loans
Nationally, the US recreational boating industry generates approximately $230m in annual economic impact and supports more than 812,000 jobs
South Carolina Republican Congresswoman Nancy Mace has introduced the ‘No Tax on Boat Loan Interest Act of 2026 (H.R.7222)’, a federal tax bill that would expand the above-the-line interest deduction to cover certain American-made boats and provide tax relief to boat buyers across the US.
The legislation would amend the Internal Revenue Code to extend an existing above-the-line interest deduction – currently available for loans on American-made motor vehicles – to qualifying American-made recreational boats assembled in the United States.
The boating industry generates more than $6.5bn in annual economic impact in the state of South Carolina, supports over 27,100 jobs, and serves a market of more than 350,000 registered recreational boats.
“South Carolina’s boating industry is the backbone of our coastal economy,” says Mace. “This legislation ensures American-made recreational boats are treated fairly under the tax code, supporting the thousands of South Carolina families whose livelihoods depend on marine manufacturing and services. It’s about protecting good-paying jobs in our coastal communities while providing tax relief to hardworking families.”
The bill follows the passage of the so-called ‘One Big Beautiful Bill‘, which allowed taxpayers to deduct interest paid on loans for American-made vehicles. Mace’s legislation would extend the same tax treatment to recreational boats, a change that industry groups, including the National Marine Manufacturers Association (NMMA), say would support domestic manufacturing and improve affordability for boat buyers.
“The No Tax on Boat Loan Interest Act recognises the vital economic role recreational boating plays across American communities,” says Frank Hugelmeyer, president and CEO of the NMMA. “With 95 per cent of boats sold in the US built here at home, and the vast majority by small businesses, this bill helps strengthen American manufacturing while making boating more accessible to families facing rising costs.”
‘Benefit to local marine businesses’
Matt Gruhn, president of the Marine Retailers Association of the Americas (MRAA), says the bill would benefit working families and local marine businesses. “Extending the no tax on car loan interest provision to American-made recreational boats provides meaningful relief to Americans who support a domestic industry built largely by small businesses, including many along the South Carolina coast.”
David Kennedy, manager of Government Affairs at Boat Owners Association of the United States (BoatUS), highlights the everyday importance of boats for many families. “For many households, a boat is a family’s largest outdoor recreation investment and, in some cases, a primary means of transportation. Treating boat loan interest in the same manner as cars and recreational vehicles is sound tax policy.”
Under H.R.7222, eligible taxpayers could deduct up to $10,000 per year in interest paid on loans for qualified recreational boats. The deduction would apply through 2028 and would phase out for taxpayers with modified adjusted gross income above $100,000 ($200,000 for joint filers). Taxpayers would be required to provide the vessel’s hull identification number on their tax return.
To qualify, boats would first have to be used by the purchaser, be classified as a recreational vessel under federal law, be defined as a motorboat under federal regulation and be assembled in the United States.
Nationally, the US recreational boating industry generates approximately $230m in annual economic impact and supports more than 812,000 jobs.
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