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

AI-Generated Summary

Updated July 6, 2026 at 1:43 PM UTC

The Boat Loan Interest Deduction Act of 2026 changes the tax code so that interest paid on loans for certain recreational motorboats can be deducted, just like interest on qualifying passenger vehicles. It defines which watercraft qualify and updates related identification‑number references. The changes apply to loans taken out after December 31, 2025 and affect taxpayers who purchase eligible boats.

Key Provisions

Adds an “applicable watercraft” category to the definition of an “applicable passenger vehicle,” allowing loan‑interest deductions for recreational motorboats whose original use begins with the taxpayer and that are assembled in the United States.
Specifies that the watercraft must be a motorboat as defined by federal regulations and must meet the recreational vessel definition in U.S. law.
Updates tax‑return language to require a hull identification number (instead of a vehicle identification number) for watercraft and allows either a vehicle or hull ID number in related reporting sections.
Sets the effective date for these changes to loans incurred after December 31, 2025.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 30, 2026

View full timeline

HouseIntro Referral

Introduced in House

June 30, 2026

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 30, 2026

Bill Text

Latest available legislative text

Reading Mode

Raw Text PDF XML

Introduced in HouseIssued June 30, 2026

I

119th CONGRESS

2d Session

H. R. 9537

IN THE HOUSE OF REPRESENTATIVES

June 30, 2026

Mr. Yakym (for himself and Mr. Davis of North Carolina) 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 allow a deduction for loan interest payments made with respect to certain watercraft.

1.

Short title

This Act may be cited as the Boat Loan Interest Deduction Act of 2026.

2.

Qualified passenger vehicles include certain watercraft for purposes of deduction for interest paid or accrued

(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

For purposes of this paragraph—

(i)

In general

The term applicable passenger vehicle means an applicable motor vehicle or an applicable watercraft.

(ii)

Applicable motor vehicle

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

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 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 watercraft the final assembly of which did not occur in the United States.

.

(b)

Conforming amendments

Such Code is further amended—

(1)

in section 163(h)(4)(B)(iii)—

(A)

by striking VIN in the heading and inserting Identification number, and

(B)

by striking the vehicle identification number of the applicable passenger vehicle described in clause (i) on the return of tax for the taxable year. and inserting

on the return of tax for the taxable year—

(I)

the vehicle identification number in the case of an applicable motor vehicle, or

(J)

the hull identification number in the case of an applicable watercraft.

, and

(2)

in section 6050AA(b)(2)(E), by striking vehicle identification number and inserting vehicle or hull identification number.

(c)

Effective date

The amendments made by this section shall apply to indebtedness incurred after December 31, 2025.