H.R. 9537: Boat Loan Interest Deduction Act of 2026

This bill would change federal tax law so that certain boat loan interest could be deducted, in a way similar to the current deduction for interest on some vehicle loans.

What would qualify

The bill would expand the definition of a qualifying “passenger vehicle” to include some watercraft. To count, the watercraft would have to:

• be bought by the taxpayer as the first user of the vessel,
• be a recreational vessel,
• be a motorboat, and
• have final assembly in the United States.

It would also keep the existing rule that qualifying motor vehicles must have final assembly in the United States. In other words, the bill would treat some U.S.-assembled recreational motorboats more like qualifying cars and trucks for this tax deduction.

How the tax filing rules would change

Under current law, taxpayers claiming this deduction must provide a vehicle identification number. The bill would update those reporting rules so that:

• a taxpayer would provide a vehicle identification number for a qualifying motor vehicle, or
• a hull identification number for a qualifying watercraft.

It would also make a related technical change to another IRS reporting provision so that it refers to either a vehicle identification number or a hull identification number.

When it would take effect

The changes would apply to debt incurred after December 31, 2025. That means loans taken out after that date could potentially qualify, if they meet the bill’s other requirements.

Practical effect

If enacted, the bill would let some people deduct interest paid on loans used to buy certain new recreational motorboats assembled in the United States. It would not apply to every boat or every loan, and it would not apply to vessels that were not first used by the taxpayer or were not assembled in the United States.

Relevant Companies

• MCY — Mercury Marine, a major manufacturer of marine engines used in recreational boats; demand for qualifying boats could affect engine sales.
• BC — Brunswick Corporation, a large recreational marine company with boat brands and marine products that could see increased demand for eligible boats and related equipment.
• MPX — Marine Products Corporation, which manufactures recreational fiberglass powerboats and could be directly affected by changes in consumer demand for eligible motorboats.