Sponsor
Todd Young
Senator · R-IN
Senator · R-IN
The bill lets buyers of trailers and campers deduct loan interest—lowering their after-tax cost—but at the expense of reduced federal revenue, potential unfairness to recent purchasers, and added compliance complexity.
Owners and buyers of recreational vehicles (trailers, campers, and similar vehicles) can deduct interest on loans for these vehicles as investment interest under section 163(h) for debt incurred after 12/31/2025, reducing taxable income and lowering the after-tax cost of purchasing such vehicles.
Taxpayers generally: Expanding deductible interest eligibility for RV loans reduces federal tax revenue, which could increase deficits or create pressure to cut spending or raise other taxes.
Taxpayers who purchased recreational vehicles before January 1, 2026 receive no retroactive benefit, creating unequal treatment that disadvantages recent buyers compared with future purchasers.
Taxpayers and the IRS may face added complexity and compliance costs because including trailers and campers as qualifying investment assets requires determining eligibility and allocating mixed personal/business use.
Based on analysis of 1 section of legislative text.
Expands the statutory definition of “qualified passenger vehicle” to include trailers, campers, and similar two‑wheeled recreational vehicles for §163(h) interest-deduction rules.
Official title: Amend the Internal Revenue Code of 1986 to allow a deduction for loan interest payments made with respect to certain vehicles.
Introduced June 2, 2026 by Todd Young · Last progress June 2, 2026
Reclassifies certain recreational vehicles — including trailers and campers with at least two wheels — as “qualified passenger vehicles” for purposes of the federal interest-deduction rules in 26 U.S.C. §163(h). That change alters how interest on debt tied to those vehicles is treated under the investment-interest limitation and related interest-deduction rules. The rule applies to indebtedness incurred after December 31, 2025.