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No Tax on Boat Loan Interest Act of 2026
To amend the Internal Revenue Code of 1986 to include watercraft as applicable passenger vehicles for purpose of deducting personal loan interest.
Summary
This bill amends the Internal Revenue Code to allow taxpayers to deduct interest paid on loans for recreational boats, similar to the existing deduction for vehicle loan interest. The bill defines "applicable watercraft" as recreational vessels and motorboats that are US-manufactured and being used for the first time by the taxpayer, excluding vessels assembled outside the United States. Taxpayers claiming the deduction must report the boat's hull identification number on their tax return. The bill applies to boat loans with interest accrued after December 31, 2024.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Rep. Mace, Nancy [R-SC-1] (R-SC)
1 cosponsor
Actions (2)
- Jan 22, 2026 Referred to the House Committee on Ways and Means. · house
- Jan 22, 2026 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE HOUSE OF REPRESENTATIVES
January 22, 2026
Ms. Mace introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to include watercraft as applicable passenger vehicles for purpose of deducting personal loan interest.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “No Tax on Boat Loan Interest Act of 2026”.
SEC. 2. NO TAX ON BOAT INTEREST.
(a) In General.—Section 163(h)(4)(D) of the Internal Revenue Code of 1986 is amended to read as follows:
“(D) Applicable passenger vehicle.—
“(i) In general.—For purposes of this paragraph, the term ‘applicable passenger vehicle’ means an applicable motor vehicle or an applicable watercraft.
“(ii) Applicable motor vehicle.—For purposes of this subparagraph. the term ‘applicable motor vehicle’ means any vehicle—
“(I) the original use of which commences with the taxpayer,
“(II) which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails),
“(III) which has at least 2 wheels,
“(IV) which is a car, minivan, van, sport utility vehicle, pickup truck, or motorcycle,
“(V) which is treated as a motor vehicle for purposes of title II of the Clean Air Act, and
“(VI) which has a gross vehicle weight rating of less than 14,000 pounds. Such term shall not include any vehicle the final assembly of which did not occur within the United States.
“(iii) Applicable watercraft.—For purposes of this subparagraph, the term ‘applicable watercraft’ means a watercraft—
“(I) the original use of which commences with the taxpayer,
“(II) which is a recreational vessel (as defined in section 2101 of title 46, United States Code), and
“(III) which is a motorboat, as such term is defined in section 90.10- 23 of title 46, Code of Federal Regulations (as in effect on the date of the enactment of this subparagraph). Such term shall not include any vessel the final assembly of which did not occur in the United States.”.
(b) Hull Identification Number Required.—Section 163(h)(4)(iii) of such Code is amended by striking “the vehicle” and all that follows through the end of the sentence and inserting “on the return of tax for the taxable year the vehicle identification number (in the case of an applicable motor vehicle) or the hull identification number (in the case of an applicable watercraft).”.
(c) Conforming Amendment.—Section 6050AA(b)(2)(E) of such Code is amended by inserting “or hull” after vehicle.
(d) Effective Date.—The amendments made by this section shall apply to indebtedness incurred after December 31, 2024. <all>
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