No Tax on Boat Loan Interest Act of 2026

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7222 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 7222

  To amend the Internal Revenue Code of 1986 to include watercraft as 
 applicable passenger vehicles for purpose of deducting personal loan 
                               interest.


_______________________________________________________________________


                    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.
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