NMMA Success in Washington
NMMA’s ability to be successful in Washington is due to members like you. Your voice is our most powerful asset. Thank you for your continued support!
Some of our key achievements from 2017 include:
- Stopped the national year-round sale of E15.
- Preserved the second home interest deduction for boats under the new tax reform package, and ensured there was no new luxury tax imposed on boat sales.
- Lowered corporate tax rates and pass-through rates, and secured improvements to the estate tax, and allowing immediate business expensing as a part of a major federal tax reform package.
- Fought for boating infrastructure after hurricanes across the Gulf, which provided to be beneficial as Congress put together three disaster aid packages totaling over $130 billion.
- Ensured funding for the Everglades restoration with letters to key Senators regarding its critical importance. $76 million was secured for the South Florida Ecosystem Restoration (SFER), protecting the access for 905,000 Floridian boaters to pristine waters and habitat.
- Championed the Coast Guard bill in the House and Senate that includes boating safety language for engine cut off wear in boats under 26 feet, updates to flare carriage requirements, and support for personal locator devices.
- Introduced the Modern Fish Act, with bipartisan support, in both the House and Senate, after passage out of the House Natural Resources Committee.Extended red snapper season from 3 to 42 days in Florida, Texas, Louisiana, Mississippi and Alabama.
- Met with Department of Commerce and USTR to ensure the marine industry’s priorities around NAFTA are front and center.
- Worked directly with NOAA Sanctuaries to promote the continued protection of the Florida Keys National Marine Sanctuary and the proposed Lake Michigan Marine Sanctuary.
- NMMA serves on a task force of copper paint stakeholders, working with the EPA to ensure it continues to allow copper to be used as an antifoulant in recreational boat bottom paint. The task force is also pushing the EPA to approve a new testing program that will greatly benefit marinas and harbors.
- Completed a two-year initiative to enact new laws that makes it easier for local and state officials to remove near-derelict vessels from key waterways. The new laws proved to be very helpful after Hurricane Irma as the state works to force owners to remove heavily damaged boats and, when owners can’t be identified, have them removed before they sink or otherwise become a hazard.
Helped enact new rules in Pennsylvania that allow wakesurfing behind boats powered by jet-drives and sterndrives that have propellers forward of the transom.
- Helped secure legislation in Oregon allowing the sale of bio-butanol as a replacement for ethanol in marine fuel.
- Successfully lobbied to defeat unwarranted boating access bans within the Lake Havasu National Wildlife Refuge.
- Completed the marine engine round robin test program and presented data to EPA, confirming the repeatability and reproducibility of recreational marine engine emissions and reinforcing the superior quality of EMD member engine emission labs.
- Completed Phase 1 of the engine certification test fuel project, which tested a variety of marine engine technologies and evaluated emissions using E0, CARB LEVIII E10 and EPA 2020 E10 to support a common North American test fuel. NMMA is also working with the International Standards Organization so that when the test fuel is finalized, the European Union test methods allow for harmonization with North American test fuel.
- Worked with California Air Resources Board (CARB) to amend the flawed marine watercraft diurnal test procedures and successfully obtained a boat builder extension until FY 2019.
- Worked with the California Office of Environmental Health Hazard Assessment (OEHHA) to successfully obtain “Safe Harbor” language for boat builders. This language, if properly implemented, protects boat builders from Proposition 65 legal action. Also drafted Proposition 65 guidance for engine and accessory manufacturers and will host a session at IBEX to prepare the marine industry for the significant changes coming on August 30, 2018.
- In a victory for boat builders, the D.C. Circuit ruled, in a 2-1 decision, that EPA cannot force manufacturers that replaced ozone-depleting chemicals (R-22) with hydrofluorocarbons, (HFCs) to stop producing them. EPA had been ignoring the technical concerns and subsequently proposed and finalized regulations in its Significant New Alternatives Policy Program (SNAP) that banned the use of HFC blowing agents used in the manufacture of marine flotation foam and composite structural stringers and bulkheads. This ruling vacates the EPA regulation.
Our next memo will take a look at some of the government relations priorities on tap for 2018.
NMMA Continues Addressing Industry Tax Reform Interests as House and Senate Try to Hammer Out a Plan
With tax reform front and center in Washington, NMMA has been meeting with elected officials to ensure the recreational boating industry’s voice is heard on key elements of interest within both the House and Senate bills.
Below is an update on the latest policy details and how NMMA is addressing on your behalf. With the final tax reform bill now being hammered out, we will continue to keep you apprised on our position. As always, please don’t hesitate to reach out with feedback or questions.
Corporate Tax Reform Highlight
- Floor Plan Financing Indebtedness: Floor plan financing indebtedness is the short-term debt used by retailers to buy high-cost items, which is secured by the inventory acquired. This includes debt used to finance the purchase of boats held for the purpose of selling them to retail customers. It also includes cars and RVs.The House bill creates an exemption from limits on deductibility of net business interest for taxpayers that paid or accrued interest on floor plan financing indebtedness. However, the bill creates a trade-off, stating that because they are exempt from the deductibility rules, companies that have floor plan financing indebtedness (and therefore take floor plan financing interest into account for determining their ratio of debt to equity) are not eligible to receive the benefits of the bill’s increased expensing provision. The increased expensing provision allows for immediate, 100% expensing of qualified property (tangible property, certain software, etc.) placed in service between 9/27/17–1/1/23.The Senate proposal does not discuss floor plan financing indebtedness.
Individual Tax Reform Highlights
- Luxury Tax: Thankfully, there is no talk of a luxury tax so far. The only luxury language is in the Senate proposal, and would raise the current fairly tight caps on allowable depreciation amounts for luxury passenger automobiles (defined as 4-wheeled, primarily for use on roads).
- Second Home Mortgage Interest Deduction: As NMMA reported last week, under the House bill, the deduction would not apply to second homes, and it would be gone not just for boats but for RV’s and everything else that had qualified as a second home in this category. For primary residences, mortgage interest deduction was halved from a million to $500,000, and there would be no deduction for interest on home equity. Real estate and builders have been pushing back hard on those items.The Senate proposal would eliminate the home equity deduction, but would not alter the rest of the credit—including its application to second homes.
Estate Tax: The House bill and the Senate proposal would both nearly double the basic (per filer) exemption amount under which estate, gift, and generation-skipping transfer taxes on the property do not apply. Both use similar language, but the House cites this figure as being $10 million, while the Senate Finance Committee lists it as “approximately $11 million.”
The House bill would terminate the estate tax and generation-skipping tax after 2024. Currently, there isn’t language in the House bill or Senate proposal that directly addresses valuation of family-owned entities for estate tax purposes. In particular, there aren’t references to Section 2704, which sets special valuation rules for valuing intra-family transfers of interests in corporations and partnerships subject to lapsing voting or liquidation rights and restrictions on liquidation—and was the subject of the 8/4/16 IRS notice of proposed rulemaking. There is a section with similar language that pertains to re-characterization of certain gains in the case of partnership profit interests (that includes a part on transfers of partnership interest to relatives), but it states that it pertains to partnership profit interests held in connection with performance of investment services.