RVIA Economic Impact Study

The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.

Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .

RVIA Watches New Tax Bills for Affects on RV Industry

Tue Dec 5, 2017

145072659275994.jpgIn its RVIA Today Express newsletter on Monday, the Recreation Vehicle Industry Association compared the tax reform bill that was passed by the Senate early Saturday morning and the House bill, and discussed features of both bills.

The Senate passed its tax reform bill on a 51-49 vote. The Senate and House must now appoint members to a conference committee to reconcile the different versions of the tax bills. The intent of the House and Senate leadership is still to try to have a final bill to the president before the end of the year.

Although both bills have much in common, namely the drastic cutting of the corporate tax rate, elimination of a number of personal deductions, and changes to the estate tax, the bills also have many critical differences that will have to be ironed out before the bill can make it to the president’s desk.

The RVIA Today Express article, "What is RVIA Watching For in the New Tax Bills?," states there are two items in the bills that are of critical interest to the RV industry:

  1. "The Senate bill makes no changes to the current mortgage interest deduction. RVIA had previously contacted Senators to urge that the mortgage interest deduction continue to be available on second homes, including RVs. The House bill would limit the deduction to interest of only $500,000 and restrict it to only the primary residence."

  2. "Another important amendment to the Senate bill, which was added as part of the final managers’ amendment, would allow all floor plan interest to continue to be deducted as a business expense, rather than capping it to only allow the first 30 percent of interest expense to be deducted as the original Senate bill would have done. "This is a critical benefit to RV dealers and both the House and Senate versions would now allow full deductibility of floor plan interest expenses."

The article states "RVIA will continue to work to ensure that provisions of importance to the industry will be preserved in any final bill which is brought back before the Congress and sent to the President."

The article provides the chart below for a comparison of key provisions in the House and Senate bills.

Summary of House and Senate Tax Reform Provisions

Category: Corporate taxes
Current Law: Top rate of 35%; pass-through entities taxed at individual tax rate of owner, which can be as high as 39.6%
House GOP Plan: Top rate of 20% for corporations and 25% for small businesses that pass on profits to owners and are taxed at individual tax rates
Senate GOP Plan: Top rate of 20% for corporations starting in 2019; allows small business owners to deduct some earnings, pay personal tax rate on the remainder; small business provision sunsets after 2025

Category: Income taxes
Current Law: Seven brackets:10%, 15%, 25%, 28%, 33%, 35%, 39.6%
House GOP Plan: Four brackets:12%, 25%, 35%, 39.6%
Senate GOP Plan: Seven brackets:10%, 12%, 22%, 24% , 32%, 35%, 38.5%; sunsets after 2025

Category: Business Interest Deduction
Current Law: Allows businesses to deduct interest paid
House GOP Plan: Caps deduction at 30% of EBITDA; amended in mark-up to remove floorplan financing from this provision.
Senate GOP Plan: Limits the deduction for net interest expense to 30 percent of adjusted taxable income; amended to allow all floor plan interest expenses to be deducted.

Category: Affordable Care Act individual mandate
Current Law: IRS Code requires persons to be covered by health insurance or pay a tax.
House GOP Plan: Makes no changes to individual mandate.
Senate GOP Plan: Repeals individual mandate, ending tax penalties for failing to have health insurance.

Category: Standard Deduction
Current Law: $6,350 for singles, $12,700 for married couples
House GOP Plan: Increases standard deduction to $12, 000 for individuals, $24,000 for married couples
Senate GOP Plan: Increases standard deduction to $12, 000 for individuals, $24,000 for married couples; sunsets after 2025

Category: Alternative Minimum Tax (AMT)
Current Law: Limits certain tax benefits for higher-income earners
House GOP Plan: Eliminates AMT
Senate GOP Plan: Reduces number of people required to pay AMT

Category: Child tax credit
Current Law: Provides $1,000 tax credit for families making less than $110,000
House GOP Plan: Increases credit temporarily to $1,600 per child, extends credit to those earning up to $230,000; adds $300 credit per adult in a family; expires in 2023
Senate GOP Plan: Increases credit to $2,000 per child for households with income less than $500,000; sunsets after 2025

Category: Estate Tax
Current Law: Taxes estate property valued at more than $5.5 million, $11 million if passed to a surviving spouse
House GOP Plan: Increases exemption to $11 million ($22 million for a surviving spouse), repeals tax entirely after six years
Senate GOP Plan: Increases exemption to $11 million ($22 million for a surviving spouse); sunsets after 2027

Category: Mortgage interest deduction
Current Law: Allows deduction of interest on first $1 million of a mortgage on a primary and/or one other residence
House GOP Plan: Limits deduction for new mortgages to the first $500,000 of the loan and restricts the deduction to only interest on a loan for a primary residence
Senate GOP Plan: Retains deduction of interest on first $1 million of mortgage debt and allows the deduction for loans on a primary and one other residence; repeals deduction of home equity loan interest

Category: State/local and property income tax deductions
Current Law: Allows taxes paid to states and property taxes to be deducted from federal taxes
House GOP Plan: Eliminates deductions for state and local taxes; caps at $10,000 deduction for property taxes
Senate GOP Plan: Eliminates deductions for state and local taxes; caps at $10,000 deduction for property taxes

Category: Other deductions
Current Law: Various deductions and provisions allowing taxpayers to reduce tax burden
House GOP Plan: Repeals deductions for medical expenses, tax preparation, personal casualty losses, limits deductions for charitable contributions
Senate GOP Plan: Retains medical expense deduction, ends deductions for moving and tax preparation.

Category: Association Provisions
House GOP Plan: Deferred compensation provisions that would have negatively impacted the association community were removed from the House bill during mark-up.
Senate GOP Plan:Applies intermediate sanctions rules to 501(c)(5) and (c)(6) organization on due diligence in compensation; Final bill amended to continue to allow nonprofit organization exemption from unrelated business income tax (UBIT) for royalty income derived from licensing of nonprofit’s name or logo instead of eliminating the exemption as the original Senate bill would have done. Portman amendment in Finance mark-up to address deferred compensation accepted; Makes no changes to nonqualified deferred compensation plans for nonprofit employers without grandfathering in existing arrangements

Read the original article at RVIA Today Express.