RV Dealers Get Tax Break: New Law Expands Deductions for Trailer Inventory Starting 2025

The “Travel Trailer and Camper Tax Parity Act” is a textbook example of a targeted tax adjustment designed to help a specific industry manage its inventory costs. Essentially, this bill updates the IRS tax code to give businesses that sell travel trailers and campers a better deal on how they deduct interest paid on their inventory financing.

The Floor Plan Financing Cheat Sheet

For most people, paying interest on a loan is just a cost of doing business. But for dealers who finance large, expensive inventory like cars or RVs—a practice called “floor planning”—the tax rules are a little different. Before this change, the special tax treatment for “floor plan financing interest” primarily applied to motor vehicles. This bill, specifically Section 2, expands that definition to explicitly include travel trailers and campers designed for temporary living and towable by a motor vehicle. This is a big deal for RV dealerships because it means the interest they pay to keep those big, shiny campers on the lot can now be deducted more favorably under Section 163(j)(9)(C) of the tax code.

What This Means for the Cost of Your Next RV

Think of it this way: a dealer has to borrow money to buy a dozen campers from the manufacturer before selling them to you. That loan has interest, which is a significant operating cost, especially when interest rates are high. By allowing dealers to treat this interest as “floor plan financing,” the bill effectively lowers the cost of holding that inventory. For the dealership, this can mean lower overall taxes, which theoretically reduces the financial pressure to move inventory quickly or raise prices just to cover financing costs.

This isn't just about massive RV superstores; it applies to smaller, local dealers too. If your local dealer can save money on their inventory financing, it gives them more flexibility in pricing and stocking the models you want. The change is strictly defined: the vehicle must be a trailer or camper designed for “temporary living space for recreation, camping, or seasonal stays,” which keeps the benefit focused squarely on the recreational vehicle market. It’s a clear, low-vagueness provision that provides targeted financial relief.

When the Rubber Hits the Road

There’s no immediate rush to change accounting practices, however. This tax update isn't retroactive. It only applies to tax years beginning after December 31, 2024. So, while the bill provides a clear benefit, businesses won't see the impact on their balance sheets until the 2025 tax season. The only group negatively affected, in a technical sense, is the federal government, which will collect slightly less tax revenue from these businesses due to the expanded deduction. Overall, this is a clean, targeted piece of legislation designed to support the financial health of the RV sales industry by lowering a specific operational expense.