Rep. Nancy Mace Introduces Bill To Cut Taxes For South Carolina Boaters, Boost State's Marine Industry

WASHINGTON, D.C. (Jan. 23, 2026)- Today, Congresswoman Nancy Mace introduced the No Tax on Boat Loan Interest Act of 2026, legislation to strengthen South Carolina's marine manufacturing industry and put money back in the pockets of our state's boating families. The bill extends the existing above-the-line loan interest deduction available for American-made motor vehicles to American-made boats, providing critical tax relief to South Carolina families and coastal communities.

In South Carolina, boating is an essential mode of transportation, a part of our way of life, and a key economic engine, with the recreational boating industry generating more than $6.5 billion in annual economic impact and supporting more than 27,100 jobs in the state. This bill is a lifeline for the thousands of workers employed in the recreational boating industry and makes boat ownership more affordable for South Carolina families.

South Carolina is home to more than 350,000 registered recreational boats, fueling steady demand for marine manufacturing, dealers, service providers, marinas, and coastal small businesses across the state. By making American-made boats more affordable, this legislation directly supports the South Carolina workers, manufacturers, and businesses who depend on our thriving boating industry.

"South Carolina's boating industry is the backbone of our coastal economy," said Congresswoman Mace."This legislation ensures American-made recreational boats are treated fairly under the tax code, supporting the thousands of South Carolina families whose livelihoods depend on marine manufacturing and services. It's about protecting good-paying jobs in our coastal communities and providing tax relief to the hardworking South Carolina families who power our state's economy."

South Carolina's boating industry is a major economic driver, particularly in the Lowcountry and coastal regions. The state's boat owners, marine dealers, manufacturers, and marina operators will directly benefit from this legislation, which incentivizes purchases of American-made boats while providing financial relief to middle-class South Carolina families.

Key Provisions:

The legislation updates the tax code to allow interest paid on loans for qualified recreational watercraft to be deducted in the same manner as interest on motor vehicle loans. Similar to the no tax on car loan interest provision of the tax code, the maximum annual deduction is $10,000 per year, the deduction applies through 2028, and the deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers). Taxpayers must provide the hull identification number of their boat on their tax return.

To qualify, boats must:

• Be first used by the purchaser
• Be classified as recreational vessel under federal law
• Be classified as a motorboat under federal regulation
• Be assembled in the United States

The U.S. recreational boating industry generates $230 billion in annual economic impact, supporting more than 36,000 businesses and 812,000 jobs across manufacturing, sales, service, and marina operations.

The No Tax on Boat Loan Interest Act of 2026received support from national boating industry groups:

Frank Hugelmeyer, President and CEO, National Marine Manufacturers Association (NMMA):"The No Tax on Boat Loan Interest Act recognizes the vital economic role recreational boating plays across American communities. With 95 percent of boats sold in the U.S. built here at home, and the vast majority by small businesses, this bill helps strengthen American manufacturing and protect good jobs. At the same time, it makes boating more accessible to families facing rising costs and encourages time on the water for recreation. We thank Congresswoman Nancy Mace for her leadership and commitment to supporting a thriving, homegrown industry."

Matt Gruhn, President, Marine Retailers Association of the Americas (MRAA):"The MRAA applauds the leadership of Representative Mace for introducing the No Tax on Boat Loan Interest Act, which will provide needed relief to American families who wish to invest in an American-made boat in order to spend time enjoying our nation's beautiful fresh and saltwater ecosystems. The provisions put forth in this bill will expand the 'No Tax on Car Loan Interest' provision included in the recently passed One Big Beautiful Bill Act to American-made recreational boats. This change will provide needed relief to hardworking Americans who support our nation's recreational boating industry by allowing them to deduct interest paid on loans used to buy American-made watercraft. With the majority of boat owners in America making less than $100,000 a year, this bill stands to significantly benefit working-class Americans and help encourage more folks to get on the water to the benefit of their health and the recreational boating industry at large."

David Kennedy, Manager of Government Affairs, Boat Owners Association of the United States (BoatUS):"A boat is often a family's single biggest investment in outdoor recreation, bringing together multiple generations on the water. And for many, a boat is their primary means of getting to work and school. Treating boat loan interest in the same manner as cars and recreational vehicles is sound tax policy. On behalf of our over 740,000 members nationwide, including some 20,000 in South Carolina, we applaud Representative Mace for bringing this proposal forward."

See the No Tax on Boat Loan Interest Act of 2026 Bill Text HERE:

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